I am concerned about the reverse split As a long term investor in theScore I am concerned with the reverse split.
On December 29, 2020 leadership filed a base shelf prospectus, which when made final, will allow theScore and certain of its securityholders to qualify the distribution by way of prospectus in Canada of up to $325,000,000 of Class A Subordinate Voting Shares of the Company, debt securities, warrants, subscription receipts, units, or any combination thereof, during the 25-month period that the base shelf prospectus is effective.
This means the are intending to dilute the current share base in order to fund growth (marketing is the only way to grow in this industry and it's very expensive). If they didn't approve the reverse share split this dilution would effect their intentions on going on the Nasdaq as there is a minimum $3 share price requirement. If they issued more shares at $5 there is a chance the price could drop below $3 and their Nasdaq plans will be thwarted. However this split will allow for the share price to stay well above the $3 Nasdaq threshold after dilution.
Not to mention a $50 share price will not be appealing to the smaller investors who are driving this stock price. As a small investor I rather invest in a $5 stock that can go to $10 because going from $50 to $100 is much more difficult. With the Nasdaq upgrade there will be more sophisticated investors who will see the 2.3 billion valuation and their $20 million revenue and decide a 100 time multiple on revenue is not reasonable.
I will be selling after the vote, get my return and find a gambling stock with more upside. I am thinking FANS is next up in this space.