RE:RE:RE:can we get a recount on the merger votePamplonaTrader wrote: PamplonaTrader wrote: Raising $50mm at $0.30 would dilute current shareholders by more than 40%!!!
OUCH!
To put this into context, if you thought Triple R was a $1Bln takeout, you're going to need it to sell for almost $2Bln to realize your price target with dilution.
And if it doesnt sell in 2016? 2017? etc? Even more dilution!
I see way too many newbie comments on here to the effect of "This is a world class deposit! The pounds are still there! Eventually the market will turn!" blah, blah, blah.
Again, equity cost of capital and the concept of dilution is, weirdly, a concept that the average retail investors simply does not grasp. A pitty!
Dilution doesn't matter to Dev. Why? First, he maintains exposure to 10% of any deal dollar value through options which increase as the share capitalization increases with ongoing dilution. Second, what is important is raising the equity capital to continue paying the G & A, followed by some exploration to keep the story alive. Doubling the share capitalization to double the pounds, would result in a flat share price, but along with continued high salary and travel expenses, double Dev's value as his options position would double. Like the old Sultan's of Swing song "Money for nothing and chicks for free"........