Share counts and share prices change with the weather...There is an ebb and flow in the world of share counts.
Relating to Gamehost, I am indifferent whether the shares outstanding are 15mm, 20mm or 25mm.
There are always pros and cons.
Try to keep your eyes on the "Market Capitalization" of a business rather than the share count.
Going forward, if GH's share count shrinks, the share price will climb as profitability per share improves on a per share basis. We have established this very important benefit and can agree on it.
Let's say a wonderful opportunity for GH to acquire, or partner with, privately held entertainment / hospitality assets presents itself. Let's say the cost of the deal is valued at $100mm.
That would be a transformative transaction when considering GH is worth $200mm today. Introducing $100mm worth of operating assets would increase the size of GH's operating capacity by 50%!
If the company had been working away diligently on retiring shares, we may find our share price then trading around $15-16.
What an opportunity it would be to issue $50mm of shares at a price of $14-15 and borrowing an additional $50mm to fund a $100mm merger / acquisition.
So you can start to picture where I'm going with this bar stool banter.
The share count would jump by 3.5mm if the company issued $50mm worth of common stock at $14.50/sh to help fund a large deal.
So if we were at 19mm, or 21mm or 23mm when that happens, really doesn't matter.
We could add 3mm to 5mm shares to the count if company needed to raise capital.
Number of shares insiders and Nukester and JimmyCash and Justin Trudeau own won't be part of the discussion.
The number of shares we wish to own is really a function of our own risk tolerance and personal investment objectives. I have friends with 50 shares and I have friends with 5,000 shares. Again, we are all shareholders in the company and our stakes are only important to our accountants keeping tabs on montly dividend payments.
Bridge and Kasking may own 5% of the shares, and I'm excited for them!
In the end of all this, we are a public company that has access to public markets for capital if needed. The decisions made and actions taken by management and BOD these past six years have positioned Gamehost to emerge from an extended energy recession and a 2yr pandemic panic in great shape physically and financially. I'll repeat what I said yesterday, it takes time to heal this type of business after facing forced closures. We are now working through the tail-end of this process. Give the company another 12 months and $80 oil, we will come back here celebrating with Kasking and his band of slot-raiding buddies. $12 share price is very reasonable to expect. Hurry up and wait they tell me.
That's my plan, nice and boring.
Gamehost has optionality because they carry very minimal debt and are very clever allocators of capital.
The stock chart doesn't give them credit for their efforts. Not yet.
That will change with time.
For those who don't want to wait to see what GH looks like in 2023, well, that's their personal investment decision.
By the time the outliers decide to buy their GH shares back, I'll bet the shares are $11-12.
Russter has warned others not to listen to my opinions. I respect that. 80% of the time I'm wrong. The other 20% of the time I'm just lucky.
He knows his stuff.
