Analysis by BIDSMAKER1 Its possible however a l
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Posted On: 04/10/2018 7:15:52 PM
Analysis by BIDSMAKER1 Its possible however a lot depends on what the CEO does as a result of the April 18th results for RS or AS increase. If shareholders are successful voting down AS increase and voting down RS the company will have to utilize cash flow to support and grow its operations. This would mean the AS remains maxed out which would actually be of some benefit to the company in that it would drive PPS much higher.
If a RS is approved the risk to the company is that the PPS is not high enough yet to really be of any benefit to the company.
If AS is approved from 500 million to 3 billion the shareholders have a 1:6 dilution ratio and the CEO has the ability to finance the company from stock rather than from revenue. The problem IMO with this is there are no controls on exactly how the CEO would utilize those shares which could include toxic debt and since debt conversions almost always make their way into the retail market it would drive PPS down. The offset is that at some point the company cash flows positive which reduces the need for toxic forms of financing but again, there are no controls or assurances protecting shareholders.
If AS and RS are approved IMO that is excessive and unnecessary even though the company could then very aggressively use a combination of shares for acquisitions, etc., followed by RS to grow the company until a relisting on NASDAQ. It is unlikely that either AS or RS will be approved. The tradeoff is a gamble that if no approval from shareholders could pay off big to shareholders. Note that the share price would also increase significantly which does in fact help the company.
If no RS and no AS trade volumes, the hospital acquisition occurs May 1 and the spin off happens it will be huge and could make numerous shareholders into millionaires. You could see massive highs and lows from day trader activity with the high probability that short term the stock would gap well beyond the 3.00 range as supply dries up.
Right now the type of trading we are seeing are MMs creating large pricing differences between bid and ask and we are seeing larger investors buying low, flipping high then rebuying. That will work for them for several trading days but by the same token supplies are limited and at some point price per share will quickly increase making it more expensive to buy and flip.
Ultimately, its a truly unique situation that IMO benefits the shareholders as the PPS is hugely undervalued.
CREDIT to BIDSMAKER1
If a RS is approved the risk to the company is that the PPS is not high enough yet to really be of any benefit to the company.
If AS is approved from 500 million to 3 billion the shareholders have a 1:6 dilution ratio and the CEO has the ability to finance the company from stock rather than from revenue. The problem IMO with this is there are no controls on exactly how the CEO would utilize those shares which could include toxic debt and since debt conversions almost always make their way into the retail market it would drive PPS down. The offset is that at some point the company cash flows positive which reduces the need for toxic forms of financing but again, there are no controls or assurances protecting shareholders.
If AS and RS are approved IMO that is excessive and unnecessary even though the company could then very aggressively use a combination of shares for acquisitions, etc., followed by RS to grow the company until a relisting on NASDAQ. It is unlikely that either AS or RS will be approved. The tradeoff is a gamble that if no approval from shareholders could pay off big to shareholders. Note that the share price would also increase significantly which does in fact help the company.
If no RS and no AS trade volumes, the hospital acquisition occurs May 1 and the spin off happens it will be huge and could make numerous shareholders into millionaires. You could see massive highs and lows from day trader activity with the high probability that short term the stock would gap well beyond the 3.00 range as supply dries up.
Right now the type of trading we are seeing are MMs creating large pricing differences between bid and ask and we are seeing larger investors buying low, flipping high then rebuying. That will work for them for several trading days but by the same token supplies are limited and at some point price per share will quickly increase making it more expensive to buy and flip.
Ultimately, its a truly unique situation that IMO benefits the shareholders as the PPS is hugely undervalued.
CREDIT to BIDSMAKER1
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