Overall, a very positive development for the compa
Post# of 56324
Posted On: 11/19/2014 11:03:50 PM
Re: BigAddison #43574
Overall, a very positive development for the company as it gives CEN Biotech the ability to address the share structure without having a reverse split. In this way, Bill maintains his word regarding no reverse split as stated repeatedly, and the float for CEN Biotech is reduced substantially without having to buyback and retire shares which would have put a strain on financing the business otherwise.
As stated in the release, all current FITX shares will be retained by shareholders, and shareholders will receive a distribution on a pro rata basis. This would suggest that the company will announce an effective date and what the share structure/allocation will be for CEN Biotech and initial share price. I don't believe that they can set up the structure/PPS to where it would significantly change the market cap as compared to current valuations - maybe someone could shed some light on this?
I would suspect that considering most of the value of the current company lies with CEN Biotech, it would not be a surprise to me to see the following estimated structure post spin-off:
3.4B shares of FITX have a PPS of $0.0028 with the CEN Biotech spinoff having a PPS of $0.60 with a share structure of 150M shares. This would result in a combined market cap of ~$100M, in line with what exists today with FITX. This would suggest that whatever shares of FITX you currently own would fall by 90%, but you would be given that value back in the form of CEN Biotech shares at a ratio of 42 per 1000 shares of FITX. In my illustration, if you currently have 100k shares of FITX, it has a value of ~$2800. When the spin off goes through, you'll have 100k shares of FITX at a value of ~$280 (100k x 0.0028)and 4200 shares of CEN Biotech valued at ~$2520 (4200 x $0.60). The total is still $2800, so no aggregate value is lost.
The supplement side of the business hasn't been the core focus for some time now, so this gives Bill and BOD the ability to continue to focus on the MMJ/Hemp business with out being subjected to criticism of losing sight of the supplement business. It's now James Robinson's baby and I don't see what he can do to keep the share price from falling to near zero as people sell their post-spin off shares quickly.
With a significantly lower float and a PPS well above the threshold for uplisting, we should see CEN Biotech PPS appreciate easier and not be manipulated to the degree we've seen this year. I think there are still valid questions out there regarding where Hemp Tech fits in and what the A/S vs O/S structure will be for CEN Biotech, but this will be defined shortly. Again, I think this is a positive move for the company as it allows Bill to save face and resolve the share structure concern as CEN Biotech positions itself to be a licensed MMJ producer/seller.
Regards,
-kbulldog.
As stated in the release, all current FITX shares will be retained by shareholders, and shareholders will receive a distribution on a pro rata basis. This would suggest that the company will announce an effective date and what the share structure/allocation will be for CEN Biotech and initial share price. I don't believe that they can set up the structure/PPS to where it would significantly change the market cap as compared to current valuations - maybe someone could shed some light on this?
I would suspect that considering most of the value of the current company lies with CEN Biotech, it would not be a surprise to me to see the following estimated structure post spin-off:
3.4B shares of FITX have a PPS of $0.0028 with the CEN Biotech spinoff having a PPS of $0.60 with a share structure of 150M shares. This would result in a combined market cap of ~$100M, in line with what exists today with FITX. This would suggest that whatever shares of FITX you currently own would fall by 90%, but you would be given that value back in the form of CEN Biotech shares at a ratio of 42 per 1000 shares of FITX. In my illustration, if you currently have 100k shares of FITX, it has a value of ~$2800. When the spin off goes through, you'll have 100k shares of FITX at a value of ~$280 (100k x 0.0028)and 4200 shares of CEN Biotech valued at ~$2520 (4200 x $0.60). The total is still $2800, so no aggregate value is lost.
The supplement side of the business hasn't been the core focus for some time now, so this gives Bill and BOD the ability to continue to focus on the MMJ/Hemp business with out being subjected to criticism of losing sight of the supplement business. It's now James Robinson's baby and I don't see what he can do to keep the share price from falling to near zero as people sell their post-spin off shares quickly.
With a significantly lower float and a PPS well above the threshold for uplisting, we should see CEN Biotech PPS appreciate easier and not be manipulated to the degree we've seen this year. I think there are still valid questions out there regarding where Hemp Tech fits in and what the A/S vs O/S structure will be for CEN Biotech, but this will be defined shortly. Again, I think this is a positive move for the company as it allows Bill to save face and resolve the share structure concern as CEN Biotech positions itself to be a licensed MMJ producer/seller.
Regards,
-kbulldog.
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