Replies to post #60844 on Andiamo Corp. (ANDI)

[Beezerr34]

I didn't say it was a secret dude. I never thought it was a secret, but it is something that I came across in my DD. It is something that I wanted to bring up to the board because I'd never seen this MASSIVE dividend discussed. Do you understand that the point isn't that people thought it was a "secret"? The point is that this dividend happened at all. Again, I ask you if you truly understand what happened there. Please, read this again:

Quote:
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On April 15, 2010, we conducted a dividend as follows:
• For every 1 (one) share of common class stock a shareholder owns as of the
record dates, the holder will receive 1 (one) share of Preferred Class, Series A
stock
• For every 1 (one) share of common class stock a shareholder owns as of the
record dates, the holder will receive 0.2 (one-fifth of one) share of Preferred
Class, Series B stock
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So, on April 15th 2010 we know that there were 99,202,300 shares outstanding, and we know that because that's how many preferred A shares are outstanding. On the other hand, one preferred B share was issued for every five common shares held. So, if there were about 99 million common shares issued at the time, then how many preferred B shares were issued as part of this "dividend"? Well, 99 million divided by 5 equals 19,800,000. Does that number look familiar at all? Well it should because that's how many preferred B shares were outstanding.

What the above tells us is that ALL of the preferred shares were issued as part of that "dividend." There was no investment made to account for the massive value of the preferreds. The preferred share positions were derived from common share positions. The problem is that the preferred share values were hugely inflated causing "value" to be created out of nothing. I will give an example: Had I owned 10 million common shares at the time of the "dividend," then I would've received 10 million preferred A voting shares and two million preferred B shares. Are you starting to see a BIG problem? Those preferred B shares, as of not too long ago, were convertible back into common stock at a rate of 2000 to 1! So, I started out with 10 million common shares, and then after the "dividend" I am able to convert my preferred position back to four BILLION common shares! The "dividend" inflated my position by 400 times! Then, to top it all off, the preferred positions are completely anti-dilutive and protected. I invest for a living XFactor, and I have never seen such a thing. It's a big problem.