(Total Views: 354)
Posted On: 05/21/2021 2:14:27 PM
Post# of 36563
I don't think that it is the same to convert:
a) 1 NUGX for 0.2 NGIO
b) 1 NUGX for 5 NGIO
The total stock value remains the same, so the share price should be adjusted.
If you already hold NGIO B shares, which one do you prefer? The first case is not dilutive, pps stay at 10, even for previous B shareholders. The second is dilutive, the B shareholders suffer. Actually, this is this second option that makes more sense as there is arbitrage as long as NUGX pps is not equal to NGIO. In the first case, someone who wants to buy shares would only take NASDAQ, NUGX pps would sink.
100M shares at 2 dollars, 5M at 10, MC at 250M
a) 25M NGIO after conversion at 10, nobody loses but NUGX would drop
b) 505M NGIO below 0.5, NUGX are big winners in that case but pps should be the same
That's how I understand it.
a) 1 NUGX for 0.2 NGIO
b) 1 NUGX for 5 NGIO
The total stock value remains the same, so the share price should be adjusted.
If you already hold NGIO B shares, which one do you prefer? The first case is not dilutive, pps stay at 10, even for previous B shareholders. The second is dilutive, the B shareholders suffer. Actually, this is this second option that makes more sense as there is arbitrage as long as NUGX pps is not equal to NGIO. In the first case, someone who wants to buy shares would only take NASDAQ, NUGX pps would sink.
100M shares at 2 dollars, 5M at 10, MC at 250M
a) 25M NGIO after conversion at 10, nobody loses but NUGX would drop
b) 505M NGIO below 0.5, NUGX are big winners in that case but pps should be the same
That's how I understand it.
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