Posted On: 10/08/2014 11:18:34 PM
Post# of 11107
I wouldn't agree with that. It all depends on what the split ratio is going to be, and when the split is to be enacted, if it happens. Remember, the filing stated that they anticipate performing the split, and not that they will absolutely perform a split.
If a split were in the cards, the next question would be "when". The filing stated at the commencement of operations. That would be consistent with what Milan said in the June Q&A (to paraphrase, revenue generating activities would be in place prior to a potential split). This would assist with keeping a post-split PPS from dropping.
Now, the ratio. A split affects the outstanding share count, and not the authorized. Based on the annual report, there were 11.2 billion shares as of June 30th. What number would the company want to drop that down to? A 10:1 brings it to 1.12 billion, a 100:1 brings it to 112 million. Or, do they go halfsies at 50:1 for 560 million? If the company performs a stock buyback prior, then the affected share count drops even further. If they bought back 2 billion shares, you're looking at 920 million shares with a 10:1 split. It all depends on what the company may want that share count to come down to. The authorized count would then be reduced via a filing to the Nevada SOS.
In short, I think it's premature to say that we're "screwed" if a split occurs.
If a split were in the cards, the next question would be "when". The filing stated at the commencement of operations. That would be consistent with what Milan said in the June Q&A (to paraphrase, revenue generating activities would be in place prior to a potential split). This would assist with keeping a post-split PPS from dropping.
Now, the ratio. A split affects the outstanding share count, and not the authorized. Based on the annual report, there were 11.2 billion shares as of June 30th. What number would the company want to drop that down to? A 10:1 brings it to 1.12 billion, a 100:1 brings it to 112 million. Or, do they go halfsies at 50:1 for 560 million? If the company performs a stock buyback prior, then the affected share count drops even further. If they bought back 2 billion shares, you're looking at 920 million shares with a 10:1 split. It all depends on what the company may want that share count to come down to. The authorized count would then be reduced via a filing to the Nevada SOS.
In short, I think it's premature to say that we're "screwed" if a split occurs.
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