Auric - give the distortion a rest already:
1. Usually death spirals are followed by . . . . death. I usually refer to the issuance of convertible preferred equity for financing purposes as . . . . "financing through equity rather than debt", which is not a sign of weak negotiating capabilities, but rather a sign of a prudent management team at work, given ATG's circumstances at the time. This type of financing, though dilutive, is especially advisable if a company is development stage and cannot state with certainty exactly when it will flip the switch and begin revenue production. Taking on debt (with maturity dates and financial covenants) under such circumstances often leads to defaults and insolvency. It is beyond argument that ATG was desperate for the cash at that point in its history (Spring, 1998). Thankfully, they were able to raise the money they needed through a convertible equity line of credit -- you describe it in ways which would suggest it was devastating to ATG's financial condition. By contrast, I view it as an extraordinarily positive event for ATG which basically saved the company from insolvency when it was in the midst of regulatory delays of indeterminate length which were outside of its control. And, please be sure to note that virtually all of the dilution associated with the equity issued in 1998-99 (and prior to that) has been factored into the number of ATG shares outstanding for a long time now. So, while ATG has been "minting" shares (as you put it), the stock price remains stable and in double digits (notwithstanding the 250% increase in the number of shares of common which are outstanding compared to mid-1998). So, death spiral?? No, not by a long shot. I guess I should be pissed because if there were still only 10 million shares outstanding, my stock would be trading for about $24 per share -- but truthfully, if they had not gotten the equity financing when they did, my shares would probably be trading for $0.24 per share (or less). Call it what you will, but to me, the equity financing was the turning point for ATG, perhaps the most positive moment in a very dark part of ATG's short life. And as we sit on the verge of VTS launch some 12-14 months later, and I look at the recently published balance sheet for the Company, I am very thankful that Fred Rittereiser was able to secure that financing and that it was in the form of equity and not maturing debt.
2. As for your insider sale prints, your posts are a continuing joke among those who follow the company closely. Any true insider has to file a Form 4 by the 10th of the month after the actual sale is made. Only John Blohm has filed a Form 4, for a sale involving about 10% of his total beneficial interest in the Company. Even Robert Eprile (a former insider) has not filed a Form 4 though his 144 for 750,000 shares was filed 3 months ago. Your 144 prints do not reflect true insiders, but rather people who were issued unregistered shares in private placements years ago, who merely want to be able to trade them now. Although you have repeatedly pontificated that anybody filing a 144 has clearly already sold, the fact is that there is no way for you or anyone else to know whether any of these non-insiders have sold. I personally know several people who have filed 144's on previously unregistered stock in companies, including Ashton, who have never sold their shares even though they filed Form 144s. And even if they have sold, so what? These individuals are not imbued with special knowledge about when things are going to happen, or particular special knowledge regarding why to unload now rather than later. Maybe they believe (like you do) that in the short term, the stock might move down a little (say, from 12 to 9), so they want to sell now at 12 and buy it back at 9. Maybe they are content to make 600% on their investment in 3 years and need or want to buy a new Lexus. Maybe the shares they have registered represent only a small percentage of what they own. Maybe they are as dumb as rocks and are selling the day before the stock triples in price. That was certainly true of the 144's filed when the stock was $5 or less. Maybe they are geniuses and we are idiots. Who really knows. But what you are doing is the equivalent of saying that the captain and crew are abandoning ship when, in fact, only a few of the passengers have disembarked (or expressed a desire to disembark) at a scheduled stop on the cruise. It is at best a guess based on incomplete information to say that these people have sold, and an outright distortion to say that they are "insiders".
Give it a rest - and for heaven's sake, stop patting yourself on the back for these woeful posts. You are not doing a public service by distorting reality as a basis to suggest that an entirely legitimate company with a very intriguing business plan (which is in the process of being implemented) is somehow illegitimate. You have every right to believe and argue that their trading systems will not be accepted on a widespread basis or will not be as successful as necessary to make this a valuable investment. You do not, however, have the right to distort the facts in order to argue against them more effectively. It is an age old (and frankly, worn out) debating technique to set up a straw man so you can knock it down. "Insider sales at ATG" is a straw man. "Death spiral" is a straw man. The facts speak for themselves.
In a few weeks, the Company will flip the switch, and we will get to see once and for all if VTS truly has the potential that the longs are so excited about (or not). But in a year or two, ATG will still be here - neither dead, nor adrift at sea, but still busy implementing more elements of its business plan. You would be well advised to take a closer look at that which you choose to criticize with such arrogance, rather than looking at almost everything and everyone else in the industry (except the object of your critique) in order to conjure up evidence of something amiss that you clearly know little or nothing about.
MST |
