OTCQX:SREMF - Post by User
Comment by
MAGICLENSon Aug 27, 2001 11:46am
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Post# 4137847
RE: Restructuring - Options
RE: Restructuring - Options
Rod I'm holding a lot of shares of CLQ, and I'm not one desiring of speaking less than positive of CLQ.
But figure this:
If you are a credit provider lending 40 million or otherwise, why would you lend such monies unless there was an advantage and the risk return was justified.
When a financing is done, it should be done at market price, which is wasn't during the first financing (it was under). Regardless, this dilutes the existing shareholders. A second hit. Third, and worst of all, warrants may be issued that allows such a holder to purchase at a future date...this occured in the last financing. Almost always, this leads to tremendous shorting of the shares to hold only the warrants so as to minimize the risk. Professionals would grap this opportunity, and sure enough MF placed enormous profits in the the hands or these managers who outrageously shorted from 80.00, when mom and pop held on placing a mortgage on their homes or listening to the mutural fund hype regarding long term hold, "don't time the markets". A friend of mine had his life savings of 3 million reduced to 300,000. He's no longer retired but elderly.
Financing, investment banking provides excellent risk profiles for those lucky enough to get in on it. The problem with CLQ is that the price just kept dropping rendering warrants of questionable worth. Some long time longs have forgiven MF for such dealings in view of common survivial of the company...but we see him going for more and more creative financing.
MF should put up his money FIRST, and use other financing options last. That way contract signing would not be a cognitive exercise for the wealthy, but, a real gut wrencher, which is what I feel, as I'm just Joe blow who thought CLQ was a decent company to invest my savings.