The facts...40M + shares = serious dilution for a stock that has 259M (fully diluted) outstanding, and less than 8 million shares about 20 years ago.
There is a President's List, which no one , on the Minority side seems to have seen
A million options here. a million warrants there, pretty soon you're talking about a serious reallocation of ownership by the time the end-game arrives.
The common rebuttal from "some mystery poster" on a public bulletin board (in all these dilutive financing situations) is always - just go ahead and buy cheap shares yourself on the open market (often apparently cheaper than the financing price). But they never address the following arguments:
- Warrants don't require cash outlays buying shares do.
- Warrrants equal future ownership percentage transfer (to the warrant holder if exercised) remember profits per share = total profits (static) divided by the total # of shares in the end (ever increasing)
- Warrants,to the receipient are risk free (unlike for the minority shareholder who must buy shares to maintain their % ownership position)
- Warrants are typically reserved for those "more in the know", further reducing the risk to the recipient. I don't buy the EMH for one second.
- The suggestion is that minority shareholders just open up their wallets and buy blindly (in the face of a finanicng below market and a falling price that often provides "cover" for the low price of the offering). Try buying when the price is falling and you have no visibiilty, and very little faith in Mgt.(based on the directin of the sp) Very hard to do - no matter how much you believe in the product.
Insittutions and other large buyers often buy the units, and dispense with the shares, and keep the risk free warrants. This adds further pressure to the SP as you add sellers. This sets certain peeps up for another cheap round of warrant acquisitions. etc.
Between takes, Mgt often grants themselves options, to counter the dilutive effects of the financings...also on a risk free- no capital outlay basis.
Such ongoing highly dilutive events cummulatively result in a massive end-gome reallocation of ownership...but only once the "true value" is apparent to all.
MM