MGM Energy Corp MGMCF

Doesn't that mean dilution?

[oldrancher]

Hate to be cynical,   but using the "offering new rights" scheme template:

if some of the companies in the past that were going down the tube had offered a new "rights" program to raise money,  wouldn't it be an artificial demand? ;

that is, the investors that were already  losing money on an existing declining share price of a company  could then be asked to throw more money into the company's pot to keep it financed....?   Guess if a company pleads with its investors to "buy more shares on the open market to buoy up the share price",  would anyone want to take that risk?      So isn't it the same net result to offer more "rights" ?

Of course MGM Energy is a more healthy and dynamic company itself,  (and i met a nice positive MGM recruiter/engineer at a recent job fair, and was impressed by him) ,   but i think that all this "rights" package does, is get some more money out of the shareholders,  calling the process by a fancy name. And dilutes the existing share value.

Shambano:  am i all dead wrong in that assessment ?

[bouligny]

But Clayton says he will buy all common shares not otherwise subscribed for by Rights holders after November. So he will be putting more of his own money into the company despite the dilution. That is a good thing. Right? Also, this will pump a lot of fresh cash into the company which they apparently plan to spend next year. I wonder how he plans to spend it, and why. I too was taken aback by the

[shambano1]

is this really dilutive to shareholders?  yes and no I guess is the best answer I can come up with. No - if every current shareholder as of the record date exercised their rights and bought the shares then every shareholder still owns the same piece of the MGM pie that they did befroe the rights offering,  the total invested by each shareholder is higher but on a % basis it's the