Warrants (Alternative Strategy)Hello Everyone,
I do agree on only one aspect with good40 and hhoc and that is the financing part. Yes, LFD does need the cash to do a June 2011 drilling. We are all kind of expecting that funds will come from warrants however our good friend good40 said that last year LFD had 28 million warrants expire worthless. I have not checked this but I may presume him to be right.
At present we have 140 million shares o/s.
Perhaps the likes of good40 and hhoc have been hired to keep the price down as LFD wants the warrants to expire worthless in July 2011.
My thinking goes as follows. VST has hit oil so management is getting greedy. They know that VST will be flush with cash soon as they can do financing at much higher prices. VST price would soar to $ 2 so 50 million shares at $ 2 gives additional $ 100 million to VST. VST will loan up to sister company LFD the sum of $ 5 million to do the first drill. LFD ensures that warrants expire worthless keeping the float at 140 million shares o/s. LFD then hits oil and stock soars to $ 3 per share. At $ 3 per share they do a financing of 50 million shares pocketing $ 150 million, paying VST back $ 5 million. We end up with 190 million shares o/s instead of 250 million and a very high stock price.
JMHO