I'll agree that management is trying to navigate t
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Posted On: 03/21/2019 4:31:08 PM
I'll agree that management is trying to navigate through troubled waters, but if you want the assistance of shareholders attempting to do the same, you need to provide a chart, and preferably a functioning chartplotter that not only shows precisely where you are, but also all the way points to where you're going.
I may be wrong, but I believe that management can get a snapshot of the voting to date at an point they wish. If I'm correct, and if they see the vote going their way without further clarification, they'll give no additional clarification, just as they've given little guidance in the past. On the other hand, if they see themselves being defeated, they'll have a few choices. They can accept the defeat as is, or they can put out a proposal that should be more effective and ask shareholders to change their votes, or they can pull the entire proposal. I frankly would like them to pull the proposal and state that such action will only be considered again once the price is over $1 or the shares outstanding is approaching 80% of the shares authorized.
With regard to their proposal, I've mentioned the options of 1 for 100 to 1 for 500 because these are the numbers they floated when they gave what the share count would be after each of these, and a couple others, but none less than 1 for 100. After such a proposal I can't imagine them saying we're only going to do a 1 for 2, 3, or even 10.
I hate to harp on it, but even a reduction of 1 for 2 lowers the O/S to roughly 75 million, while half a billion are still authorized. When they dilute, the O/S can easily go to 300 million, so existing share would represent 25% of the company. While this is far better than 1%, it's still a huge cut.
If they do a R/S of 500, why stop there. Why not do a 1 for a million with the idea they're going to become the Berkshire Hathaway of the cannabis world with only 150 shares outstanding, but they still have half a billion authorized. While I'm being facetious, it's not that far fetched, once they reduce the total shares outstanding to less than one million, you can pretty much ignore the holders of those shares as you dilute with multi-million share offerings.
Gary
I may be wrong, but I believe that management can get a snapshot of the voting to date at an point they wish. If I'm correct, and if they see the vote going their way without further clarification, they'll give no additional clarification, just as they've given little guidance in the past. On the other hand, if they see themselves being defeated, they'll have a few choices. They can accept the defeat as is, or they can put out a proposal that should be more effective and ask shareholders to change their votes, or they can pull the entire proposal. I frankly would like them to pull the proposal and state that such action will only be considered again once the price is over $1 or the shares outstanding is approaching 80% of the shares authorized.
With regard to their proposal, I've mentioned the options of 1 for 100 to 1 for 500 because these are the numbers they floated when they gave what the share count would be after each of these, and a couple others, but none less than 1 for 100. After such a proposal I can't imagine them saying we're only going to do a 1 for 2, 3, or even 10.
I hate to harp on it, but even a reduction of 1 for 2 lowers the O/S to roughly 75 million, while half a billion are still authorized. When they dilute, the O/S can easily go to 300 million, so existing share would represent 25% of the company. While this is far better than 1%, it's still a huge cut.
If they do a R/S of 500, why stop there. Why not do a 1 for a million with the idea they're going to become the Berkshire Hathaway of the cannabis world with only 150 shares outstanding, but they still have half a billion authorized. While I'm being facetious, it's not that far fetched, once they reduce the total shares outstanding to less than one million, you can pretty much ignore the holders of those shares as you dilute with multi-million share offerings.
Gary
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