RE:RE:RE:RE:Someone is buying the unit but why?
Cbcdistressed wrote: I was tying to decide what I should do once I have the shares. Might dump them all.... but wish to see the new balance sheet first, given the oil price is closed to 100 again.
If someone bought at current level, I am all ears to hear their opinion as to why they choose to buy now. Higher oil price is the only possible explaination.
I used to hold both shares and debenture and dump the share immediately after the proposal.
Here is my read on the situation. There is going to be a huge amount of units dropped into debentureholder acccounts on Tuesday or Wednesday this week.
As of September 31, 2021 quarterly report, there was a total of 21,148,896 units outstanding. That is a very low float for a publically traded company.
With this transaction we have $24,810,800 debentures outstanding + an approximated $8,100,000 accrued and unpaid interest due to the debentureholders ($7,973,444 was anticipated due and unpaid as of December 22, 2021).
That gives us a total of approximately $33,000,000 total debt due to debentureholders, which was confirmed at the most recent news release. Take $33,000,000 / $0.05 which gives us 660,000,000 newly minted units outstanding on Tuesday/Wednesday.
Using this as a guide, existing shareholders will hold 0.0320437818181818% of the company and the market cap under normal circumstances SHOULD rise by aproximately 30x.
However, there has been ZERO marketing to bring that sort of newly minted volume into the market. Right now the market is very, very small for this name. Outside of a small group of investors, there is ZERO awareness of this name.
The company has not planned for this. They do not give two hoots about anyone but themselves. They have not planned for this and the impact it will have on the share price. They DO NOT CARE about you, about me or anyone else. They only care about themselves and their private real estate empire.
They have NOT spent the $5000/month or whatever reasonable amount it takes for a market maker that will provide liquidity - a very, very important thing for ALL public companies to do if they value their shareholders and to keep a stable share price.
This is part of the reason I intend to vote my multiple millions of shares that I will receive this week to vote these do nothing, only take care of themselves, management and BoD members OUT at the next AGM.
To continue on, what the direct reseult of this lack of planning and caring about the share price is that once this better part of a billion shares or so end up in accounts, there will be a mass exodus to purge this dead wood from their accounts - especially if the debentureholder bought for income purposes.
This will be percieved as a liquidity event. The problem is - and I will explain why yesterday was a great example to show the liquidity that this name provides.
Yesterday there was a sum total of $205.00 spent on Lanesborough shares. The share price jumped a penny for the client to purchase the last $15 to get a complete fill. This is not uncommon.
What happens when there is a liquidity event and no bid to support it?
Eager sellers that want to cash out, hit the bid. But if there is no support, the bid drops lower and lower. It is a race to the bottom. This is why a market maker is so extremely important, especially in this type of situation. It is also the reason why I am not impressed with those that manage this two-bit operation.
By Tuesday at noon, we could very realistically have no bid and the ask at $0.005 with a quarter billion shares on the ask.
As newly minted shareholders, and particularly those who voted for this hare-brained idea, have been sold a bill of goods once again by this management team that continually do it over and over and over again, with amazing regularity.
They need to shape up or ship out. It is that simple.
For me I am not going to particpate in this negligent and irresponsible management decision to let us all fend for ourselves without a market maker or someone to backstop the anticipated volume of selling that will happen this week - and for months to come.
I think what will most likely happen is some opportunitic and vulture-like company or indivual will swoop in on Tuesday and raid the poskets of newly minted unitholders - depriving them of any realistic opportunity to recover their invested capital - once again.
Once again, I am not impressed and I will plan to do everything in my power to vote them out - because they deserve to go.