RE:RE:Still under $0.90..... You make some good points below about the evolution of the shareholder base as a company goes from a story stock to one that can be measured on fundamentals.
When looking at fundamentals, in most cases investors are looking either at growth rate or profitability. GDNP, as it presently has no net profit, is in the high growth rate category. Fair enough.
However, as we are presently unprofitable our execution strategy is dependent upon raising additional capital to fund growth. Yes we can access more debt for a large portion of the growth funding but some equity will be required in order to keep the debt and equity ratios at an acceptable level while we are still unprofitable.
The issue then becomes when you have a stock price where it is currently, which is almost $.40 below the price of their last private placement, the company effectively can't raise capital without hammering part of its shareholder base (Those who are holding the $1.20 paper from the most recent private placement, as well as anyone who bought over $1.00 in the market).
So eventually GDNP will need to raise equity and if the share price remains at the sub $1.00 level then there will be substantial dilution. This matters, because when you look at growth in revenue or earnings per share and you then do a financing, the lower the share price then the more the per share value (revenue or profit) gets reduced and that then puts a lid on how high the share price can ultimately go.
The bottom line is this: it's really a race between whether the share price can start to move up significantly in time for when they need to do their next equity raise. The outcomes will be very different for shareholders given the dilutive consequences of financing under $1.00 versus over $1.20.
Hoping the stock turns around soon.
cleareye wrote: It's an interesting phenomenon: Good Natured captured people's imagination last February and rose to near 2.00, then imaginations were disappointed and moved on. Hopefully we can see a stock price move forward now based on facts, fundamentals and value, in step with reality rather than fantasies. The reality is there, we are just in a mode of changing the guard from dreamer shareholders to shareholders of value.
Over the years I see stock prices soar with companies which have no earnings, then when they start to get earnings a different crowd comes along and tries to price the stock based on "fundamentals". For the first few years the fundamentals are terrible and the stock price suffers.
This sort of changing of the guard can be confusing and painful.
cleareye.