Replies to post #263881 on ERHC Energy Inc (ERHE)

[JohnnySticks]

Excellent Post - Agree 1,000% - as do most other non SEO shareholders IMO

[TOB]

Keep in mind that other company also placed shares to a reputable firm during a downtrend and the sp continued down. Today a fraction of that last placement price.

Placements below a certain percentage of the float have no requirements for the party to disclose. This is the choice of the private party, not ERHC.

We shouldn't forget that the last placement led to Chad either. So whatever the cost or debatable effect on the share price, we don't know the benefit yet.

But let's not have the shelf debate again please, lol. I think we covered both sides of that one.

We'll see what detail we get on the 28th. If the proposed Rights Offering idea is not complete we may not hear much. I have no idea. So we're getting ahead of ourselves here.

But I can't agree with:

then this is all a game to remove retail shareholders from the picture.

I think it's a plan to raise money to explore and acquire assets to build shareholder value. Preferential terms always go to Institutional Investors and JVs. They put up more money.

But retail investors are also key to any share price appreciation. And even if a shareholder doesn't buy another share and all the shares are authorized and then issued, they are not "removed", their ownership percentage and voting rights are reduced by up to 3/4.

But how this affects the eventual value of the remaining percentage depends on what the company does with the money. If they discover oil and buy development and production stage assets, the diluted shares are worth far more than they ever would have been undiluted. Even just raising the cash improves the standing of the shares, at worst it's book neutral. If there is zero dilution and zero proven oil, they have no intrinsic value, just the cash on hand.

[ERHClongtimer]

Tryoty, from an armchair quarterback's perspective, I agree with you that the placement via Rodman & Renshaw seemed like a deal with the Devil. The terms were certainly not very favorable to current shareholders, at face value. Wonder who was the brainchild of that deal?! But maybe it was necessary to secure some of the things that have happened recently; who knows.

In any case, that placement highlights the advantage of floating a "rights offer" to current stakeholders in the company. They are more likely to invest in a company they already have a vested interest in (and perhaps at better terms for the company--and consequently better for all shareholders, vis-à-vis the R & R deal), especially if there are to be some gratuitous terms (favorable warrants) involved (as was the case with the placement via R & R). How much better to reward current shareholders for upping their investment in the company than some opportunistic, greedy broker/dealer and their client(s).

I surely hope ERHC has this in mind with the proposed increase in authorized shares. I have to believe Offor would not stand for anything less, with his substantial stake in the company. And that makes me think it might be better to save some dry powder if those favorable terms materialize.

But it's anyone's guess at this point. - Longtimer

P.S.: It has been claimed by some that there would be an increase of 3 billion shares; but that is simply not true. The most that could be issued in new shares is 2.25 billion. And I am pretty confident that no where near that number will be issued anytime soon.

[badog]

If these issues aren't addressed by Peter Ntephe on the 28th, he is clearly *not* working in the best interest of all shareholders and should be removed.

And who would remove him? And how likely would that be?

Retail shareholders have no juice...none whatsoever! Obedient acceptance...or selling out....those are the only options for us. Sure...we can post our disgust on a message board...or send emails...or threaten a lawsuit (ha). I guess it makes one feel better that they posted their opinion...but does it make a difference? Not in the least. Should management care what those holding a few million share between them think? Of course they should. But they don't...and they won't. Peter will only care what SEO and maybe a few other very large holders think. They are the ones with the juice.

So is Peter concerned with the shareholders? Yes...the majority shareholders. That is not us!

Badog

[Digdeepforsweet]

Tryoty; The history ,and past practice of pete and bod ....not excited... I really really hope I'm all wrong for us all ...glta Dig.

[mz157]

nice post.