I respect what you've been doing here for a while.
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Posted On: 02/07/2017 6:01:00 PM
I respect what you've been doing here for a while. But, I have a different opinion regarding the reverse split. It is my opinion that as long as dilution occurs after the split, then any success the company has will not be able to overcome it. At least not for current shareholders.
I would be elated if you could prove me wrong and change my mind on the matter. I don't mean this post to be argumentative or hostile...I really do hope that you can prove me wrong...Anyways, the following is an email I sent to the board of directors:
Dear BOD,
As a shareholder of REDG for multiple years, I am truly baffled and frankly quite livid regarding the timing of the reverse split. We all know that a reverse split will have to occur eventually, but this is not the time. I've sent numerous emails in the past expressing my concern about executing the reverse split too soon. The stock has already endured one "death spiral", and if there is much convertible debt remaining at all then it is a near certainty that it will happen again after the reverse split. This would reduce the value of current common shares to near zero. This would be a needless destruction of shareholder value.
http://www.investopedia.com/terms/d/deathspiral.asp
"However, upon a conversion, more shares are created, which dilutes the share price. This drop in price may cause more bond holders to convert, because the lower share price means that they will be receiving more shares. Any further conversions will cause more price drops as the supply of shares increases, causing the process to repeat itself as the stock's price spirals downward."
I propose that you cancel the reverse split for now, and wait until a point later in the year to implement it. In the meantime, get current with financial filings and get Zwagbox (among other projects) back on track. Allowing the remaining debt to convert via share issuance at a minimum share price will eliminate the risk of another "death spiral". For instance, remaining dilution may only be 25% rather than...who knows, maybe 9000+% (not a typo).
I see no benefit to doing the reverse split now. It would be a grave mistake.
Furthermore, the shareholders feel very betrayed that the preferred shares are not being reverse split as well. If the split is carried out as explained in the recent filing, then we will be wiped out while all of the insiders are not. I don't think I need to go on about how treacherous that would be. The preferred shares are convertible into common shares per the original filing. What this amounts to is that under the current plans for the r/s, those holding preferred shares are immune to dilution and may cash in at a later date after company financial "success". Meanwhile the rest of us get diluted into oblivion.
I urge all 6 of the board members to proactively fix this situation before it is too late. There is only a small window of time before the split goes into effect and cannot be undone.
I would be elated if you could prove me wrong and change my mind on the matter. I don't mean this post to be argumentative or hostile...I really do hope that you can prove me wrong...Anyways, the following is an email I sent to the board of directors:
Dear BOD,
As a shareholder of REDG for multiple years, I am truly baffled and frankly quite livid regarding the timing of the reverse split. We all know that a reverse split will have to occur eventually, but this is not the time. I've sent numerous emails in the past expressing my concern about executing the reverse split too soon. The stock has already endured one "death spiral", and if there is much convertible debt remaining at all then it is a near certainty that it will happen again after the reverse split. This would reduce the value of current common shares to near zero. This would be a needless destruction of shareholder value.
http://www.investopedia.com/terms/d/deathspiral.asp
"However, upon a conversion, more shares are created, which dilutes the share price. This drop in price may cause more bond holders to convert, because the lower share price means that they will be receiving more shares. Any further conversions will cause more price drops as the supply of shares increases, causing the process to repeat itself as the stock's price spirals downward."
I propose that you cancel the reverse split for now, and wait until a point later in the year to implement it. In the meantime, get current with financial filings and get Zwagbox (among other projects) back on track. Allowing the remaining debt to convert via share issuance at a minimum share price will eliminate the risk of another "death spiral". For instance, remaining dilution may only be 25% rather than...who knows, maybe 9000+% (not a typo).
I see no benefit to doing the reverse split now. It would be a grave mistake.
Furthermore, the shareholders feel very betrayed that the preferred shares are not being reverse split as well. If the split is carried out as explained in the recent filing, then we will be wiped out while all of the insiders are not. I don't think I need to go on about how treacherous that would be. The preferred shares are convertible into common shares per the original filing. What this amounts to is that under the current plans for the r/s, those holding preferred shares are immune to dilution and may cash in at a later date after company financial "success". Meanwhile the rest of us get diluted into oblivion.
I urge all 6 of the board members to proactively fix this situation before it is too late. There is only a small window of time before the split goes into effect and cannot be undone.
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