Will SST''s next deal have excessive dilution?Will SST's next deal involve excessive dilution?
Of course SST will in some combination issue shares, pay cash and/or borrow money to pay cash. Of any shares being issued, those will not be for the company to raise money to be spent into oblivion like many exploration companies. Instead, that stock goes into buying an income stream from silver sales. Do you think Silver Wheaton never issued any shares on its way to becoming a 2.7 billion dollar company? Silver Wheaton worked out these issues concerning dilution; why cannot Silverstone?
And here is part of how the dilution issue will be addressed, just as Silver Wheaton addressed it: As the SST stock price goes up (and it has already gone up substantially), SST will not need to issue as many shares as before to buy the same number of ounces of annual silver production.
It is also very possible that SST will have some sort of financing mechanism for its next deals which will address investor concerns about dilution. We should wait for management to show us.
Another thing: most people don't realize that when another company gets shares of SST as part of the deal, those shares typically will not become part of the public float for years. The public float will be relatively unaffected. This allows the stock price to climb up without being affected by dilution. And why shouldn't the stock price go up after more deals are announced when the company will be doubling and tripling revenues without a commensurate increase in the public float?
Tooclassy