(Total Views: 241)
Posted On: 07/05/2019 1:29:30 PM
Post# of 36564
Um, no the 9M shares will dilute the stock, even Joe has said there will be "minimal" dilution to the shareholder, but there is dilution. Or is there?
However I wasn't thinking about it in current market cap terms. So if we have currently 60,307,396 shares at $3.15, which is $180,922,188 market cap. If we maintain the market cap and after the dividend and have 78M shares outstanding, the price will go to $2.32, so that is a 26.34% drop in value for us current shareholders. However now we have 2 times as many shares personally. So 100 shares at $3.15 ($315), becomes 200 shares at $2.32 ($464), which is a 47% INCREASE in our portion of the company! That is why the stock price is rising. Shareholders will own MORE of the company after the dividend.
However I wasn't thinking about it in current market cap terms. So if we have currently 60,307,396 shares at $3.15, which is $180,922,188 market cap. If we maintain the market cap and after the dividend and have 78M shares outstanding, the price will go to $2.32, so that is a 26.34% drop in value for us current shareholders. However now we have 2 times as many shares personally. So 100 shares at $3.15 ($315), becomes 200 shares at $2.32 ($464), which is a 47% INCREASE in our portion of the company! That is why the stock price is rising. Shareholders will own MORE of the company after the dividend.
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Disclaimer: Of course, all of this is my opinion and you should not make any investment decisions based on my opinion. I have not received any non-public information.
