Doug,
What astonishes me is that people hang on all the speculation and hype on these BB stocks, spend hours reading thousands of internet posts, and then do not read the real story when it does come out. Then, quickly dismiss, out of hand as "unsubstantiated" what is written in the financials.
Insofar as your description as "clumsy" regarding my post about the IR agreement, the shares are granted by virtue of granting the option to purchase. What this means is that this one deal alone dilutes the stock by nearly 30%. When people look at the valuations, a "fully diluted" number is important and will affect the stock price.
Next, take a look at the convertibles, read the "liquidity and capital resources" section. Lots of stock at discounts of up to 30% can be dumped on the market at various times. Do the math, and you'll see what I mean.
The officers who owe the company money may have loans secured by company stock, but this doesn't mean they do not owe the company the money. The company is borrowing money at rates which are considerably higher that the rates they charge the officers. These loans originated primarily from money advanced by the company for business that never materialized, and maybe was never there in the first place.
If you don't see anything irregular in any of this, you're the kind of investor every BB stock wants. Lots of hope, lots of hype, and little sense for what the potential impact millions of new shares will have on earnings and, ultimately, the stock price.
I suggest you re-read these financial statements with a more critical eye, and as if you didn't own the stock. Then decide, based on what you see, if you would be a buyer right now. I believe you'll come to the same conclusion.
You need to understand the impact of shares continually being sold out in the open market. If you could exercise and sell immediately at a 30% profit, how long would it take you to decide if you should do it?
I'm not trying to put you on the spot Doug, but don't impugn the integrity of someone who has taken the time to actually read and analyze the financials. |
