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Posted On: 12/02/2021 7:41:58 AM
Post# of 148894
Re: Shelly2626 #111456
Here is a very good explanation of why we are down, and how the Fife loan payback works. This is from YMB:
Aleksei
"Great explanation on something important to most of us. Found on Reddit.
Actually that is not how the Fife repayment works. Fife does not need to pump the shares and does not care at all about the share price.
Think of a normal loan, with a monthly payment due plus interest etc. CYDY could make the payment directly if it was a revenue company (which is why NP called the loan 'potentially non-diluting' -- it would be non-diluting if CYDY could make the payment in cash). If CYDY cannot make the payment in cash, then the company makes the payment by releasing more shares at whatever the share price is at that moment. Fife again, does not care about the share price and does not hold the shares for any length of time.
So lets say a 1M payment is due and the share price is $1.25. Then either CYDY writes a check for 1M, or releases 800,000 shares which are immediately sold to produce a payment of 1M. Again, Fife does not hold the shares; it just asks for the cash conversion when the payment is due. This always comes due early each month just like any normal loan.
But that is also why there is always a predictable "sell off" at the beginning of the month; and with a predictable sell off, then shorts can predict the S.P. drop with the dilution of these additional shares. Watch the outstanding shares (issued shares) -- it goes up with each Fife payment (right now is at 660.2 -- check again next month for it to go up -- the 'dilution'). And anything that can be predicted in the market can be capitalized on.
And that is why the shorts are still playing this stock at even this low of a share price; they can predict a 5-8% S.P. drop at the beginning of the month every time ... and that is also why we needed the additional 200M shares authorized -- to have the power to pay these loans each month and still be in a position of strength moving forward"
Aleksei
"Great explanation on something important to most of us. Found on Reddit.
Actually that is not how the Fife repayment works. Fife does not need to pump the shares and does not care at all about the share price.
Think of a normal loan, with a monthly payment due plus interest etc. CYDY could make the payment directly if it was a revenue company (which is why NP called the loan 'potentially non-diluting' -- it would be non-diluting if CYDY could make the payment in cash). If CYDY cannot make the payment in cash, then the company makes the payment by releasing more shares at whatever the share price is at that moment. Fife again, does not care about the share price and does not hold the shares for any length of time.
So lets say a 1M payment is due and the share price is $1.25. Then either CYDY writes a check for 1M, or releases 800,000 shares which are immediately sold to produce a payment of 1M. Again, Fife does not hold the shares; it just asks for the cash conversion when the payment is due. This always comes due early each month just like any normal loan.
But that is also why there is always a predictable "sell off" at the beginning of the month; and with a predictable sell off, then shorts can predict the S.P. drop with the dilution of these additional shares. Watch the outstanding shares (issued shares) -- it goes up with each Fife payment (right now is at 660.2 -- check again next month for it to go up -- the 'dilution'). And anything that can be predicted in the market can be capitalized on.
And that is why the shorts are still playing this stock at even this low of a share price; they can predict a 5-8% S.P. drop at the beginning of the month every time ... and that is also why we needed the additional 200M shares authorized -- to have the power to pay these loans each month and still be in a position of strength moving forward"
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