BHUB shareholders, why accept being shafted by the new Management?...
1) Here what's clear, IMHO:
+ New Management (NM) wants 20 Millions to further their plans AND control the Company through a secret deal, distributing cheap shares to their cronies.
+ Skyridge who has access to more information than most says the PP deal is not yet done.
2) Possible alternative:
+ Shareholders are pissed at the PP deal made at their expense and want to fight back. They complain to NM and SEC to have the deal cancelled as being unfair to them.
+ NM, under pressure from both agrees to cancel the PP. The share price responds and, say settles around $10.00 for the time being.
3) Rights issue to raise 20 Millions:
+ NM still needs its 20 Millions and is now convinced (with the help of the complaints and the SEC) to act fairly towards its shareholders and renounce the idea of controlling the Company's voting power.
+ It offers a one for one Rights issue at a discount of 25% to the market which, for simplicity of the argument is at $10.00 per share. This grants every shareholder the right to acquire one additional share of BHUB at $7.50! Many longs would be happy at this opportunity.
+ Those who don't want to take advantage of the offered opportunity, because they don't have the money or for whatever reason, CAN RESELL their rights at a profit. The discount to the market being $2.50, savvy investors would be willing to pay, say $1.50 for each Right to own a BHUB share at $7.50, thereby saving themselves $1.00/share compared to market.
4) Conclusion:
The issue of Rights is a very common way to raise capital for Companies that are not primarily interested in shafting their shareholders and would be perfectly suitable in the case of BHUB. Of course, the figures are only an example and would have to be fined tuned to obtain the exact amount of financing required.
IT WOULD NOT DILUTE CAPITAL AT THE EXPENSE OF SHAREHOLDERS OR VEST CONTROL OF BHUB IN THE HANDS OF A FEW SELECT INSIDERS.
The above scenario can still be done if all interested parties write the Company and complain to the SEC at: enforcement@sec.gov
Regards, F. Goelo + + +
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