My Crystal Ball is 99% AccurateThe Chairman is not so dumb as to have a meeting with a shareholder and release insider information without a strong motive. The motive is called softening the uproar that would occur when the news release of the private placement comes out. According to Snowman the share price will be 30 cents and the warrant strike price 45 cents. At first I was upset with this low price as it really shows us what the company is worth. But a day later I've calmed down and can live with the price. Mission accomplished Mr Chairman, as I'm no longer scrambling to sell my shares. Your Monday 9:00am press release shouldn't impact the share price negatively....
Or will it??? My crystal ball tells me we will also learn of the huge financing cost they had to pay the investor in addition to the warrant. I'm guessing that when you consider the finders fee and legal costs approximately 10% of the proceeds will be wisked away to the same people who are putting up the money.
If I'm right then the only logical reason for doing this is that the company is in deep financial trouble. After all, if you add up all the warrants, free shares, dollars outlaid for financing over the past few years you are probably close to the net proceeds of this raise. Just ask yourself why any company would pay this and you won't need my crystal ball.