OTCPK:EXSFF - Post by User
Post by
M139on Sep 17, 2013 8:27pm
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Post# 21747096
Doing the math
Doing the mathI don't see how this qualifies as a ‘rights offering’, it’s just a PP (at a huge premium) without a warrant.
At current SP, it makes no sense to buy more shares and then have a roll back that in effect means you will pay .25 for that share, and nothing else, not even a warrant to show for it.
We know already that the SP is not going back to .05 before the split, in fact based on this deal I would say it's going to go down even further as LT shareholders bail due to the complete insanity of this so called 'Offering'. For arguments sake let’s say it splits at .035, that puts the SP to .175 but we all know from past experience that by the time we actually get our shares back for trading the MM and shysters have already shorted, naked shorted the SP down at least a few pennies so the smoke has cleared and now the SP is sitting at .12 (if you're lucky) post split and you just paid .25 for a share.
If you do the math, it just makes more sense to not buy into the offering, wait for the smoke to clear and then start buying again. Guaranteed you will average down more for a fraction of the cost.
That said, maybe, MAYBE, if they offered a warrant up with that, which I suspect they will do for the tandem public offering they discussed so why not offer the existing shareholders a warrant, seems cheesy if you ask me.
So, at this juncture I will not buy and will vote no for consolidation. Since my vote will most likely not make a dent in the process I expect we will consolidate and after the smoke clears and the price tanks, I will resume buying to average down a bit.
Of course all this is dependent on whether or not they manage to get the funding they need, if they don't maybe I am just writing the whole thing off at the end of the year.
IMO to actually be fair and call this a 'Rights Offering' they should have included a warrant for one share at the same price good for at least a year. A year from now if all goes well you will be happy to use 5 warrants and .25 to get another share. In the mean time you feel like you actually got something out of the deal.
M