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CI First Asset U.S. Tactical Sector Allocation Index ETF T.FUT



TSX:FUT - Post by User

Comment by bigopson Mar 08, 2012 4:26pm
150 Views
Post# 19645872

RE: RE: Waiting for buyers

RE: RE: Waiting for buyers

monies -- hope you dont mind if i take a crack at your question...

 

clearly the company needs $. if you look at the company trajectory over the past few years they have raised funds on an as needed basis and have often had very high levels of insider participation. also, my understanding is that much of the debt that has been placed in the company is owned by people who are either considered insiders by the exchange or who are major holders of equity but not necessarily "insiders".

 

in the past the company has done a number of rounds of financing at 5 cents while the stock was trading anywhere from 2-3 cents -- so there is a real history of support here and a track record of them not diluting shareholders based on market prices (the have not financed below market).

 

all that said, there is no guarantee and never would be that the next financing will not be dilutive. however, consider the fact that D. Beutel put in $500,000 in the last round at 5 cents and i think you can surmise that he will do his best to protect himself and all the other equity investors. when i suggest that i am thinking a couple things -- (1) he will not want to see excessive if any dilution (2) he will want to see the company cashed up so it can continue to operate. Put these two together and you can see where i am going -- my guess is that futura will do some sort of smaller financing that may or may not be dilutive but it will likely not be big enough to crush the stock even if it is dilutive. Hopefully the sign ups of dealerships continues to increase now that co-auto west is working, hopefully we hear of some non-auto or other retail chains that sign up...and the 800lb opportunity the US hopefully takes shape -- on the back of that sort of news the company will then be in position to do a big financing at better prices.

 

cash has never been the issue for these guys -- even though it seems to always be a concern....they can raise cash -- the issue is how quickly and efficiently can they grown their business. They seem to be on the right track, it is taking longer than many of us had hoped...but that is the name of the game when you are building a real business -- it always takes longer than expected.

 

i remain long on fut and look forward to hearing about more dealerships, retail locations, the US etc.

 

bigops

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