Massive authorized share increase? That is a go
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(Total Views: 299)
Posted On: 01/29/2020 7:54:46 PM
Re: PhonyBologna #5763
Massive authorized share increase?
That is a good question.
I can not say for sure what the company is thinking. I am not a board member nor do I work for the company. I'm just a shareholder that does due diligence on the company to make the most informed decisions I can.
Since I guess about 2009 or so there have been certain individuals that have attacked the company online. I eventually grew tired of misinformation so I have attempted to correct the record when possible.
As best I can tell, as in my opinion on the matter, is that Kyle likes to think long term as much as he can for the company.
Like not taking a salary, for instance. He knows that any money the company takes in, he has to raise via selling shares/private placement which (long term) dilutes the share count. If he takes a salary, each salary payment is another dilution to the share count and value which in turn makes it harder to raise funds by selling shares. It's a vicious cycle that he does not want to encourage so he has never taken a salary.
In this case with dilution in mind the number of authorized shares not outstanding goes down significantly after the reverse. So while it might be 5B (!) now, after a 10:1 reverse it goes to 500M. 20:1 means 250M.
Now, why would a company want a bunch of A/S available. Obvious answer is to sell them. However, as previously discussed (and recently verified), he is not longer selling private placements. So it is not for that.
With Kyle's experience in public companies and seeing the ones that fail vs. the ones that succeed, he knows it is a good idea for a good successful company to have shares available for business purposes if a need arises.
Only thing I can think of off hand is buying another company in a share trade swap or purchase. If there is a company that has a service we need it might be better to buy it. Or maybe he just comes across a profitable company and we buy it. I don't know. I'm just throwing something out.
I could ask for possible uses for the extra stock if you'd like.
Anyway, all I can say for sure it that it is Kyle thinking long term for the company.
That is a good question.
I can not say for sure what the company is thinking. I am not a board member nor do I work for the company. I'm just a shareholder that does due diligence on the company to make the most informed decisions I can.
Since I guess about 2009 or so there have been certain individuals that have attacked the company online. I eventually grew tired of misinformation so I have attempted to correct the record when possible.
As best I can tell, as in my opinion on the matter, is that Kyle likes to think long term as much as he can for the company.
Like not taking a salary, for instance. He knows that any money the company takes in, he has to raise via selling shares/private placement which (long term) dilutes the share count. If he takes a salary, each salary payment is another dilution to the share count and value which in turn makes it harder to raise funds by selling shares. It's a vicious cycle that he does not want to encourage so he has never taken a salary.
In this case with dilution in mind the number of authorized shares not outstanding goes down significantly after the reverse. So while it might be 5B (!) now, after a 10:1 reverse it goes to 500M. 20:1 means 250M.
Now, why would a company want a bunch of A/S available. Obvious answer is to sell them. However, as previously discussed (and recently verified), he is not longer selling private placements. So it is not for that.
With Kyle's experience in public companies and seeing the ones that fail vs. the ones that succeed, he knows it is a good idea for a good successful company to have shares available for business purposes if a need arises.
Only thing I can think of off hand is buying another company in a share trade swap or purchase. If there is a company that has a service we need it might be better to buy it. Or maybe he just comes across a profitable company and we buy it. I don't know. I'm just throwing something out.
I could ask for possible uses for the extra stock if you'd like.
Anyway, all I can say for sure it that it is Kyle thinking long term for the company.
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