Suzanne, count the money, you know the burn rate, you know that the original line of "credit" was some $10 MM, you know how much was used and more or less how much more need to be used, and as far as I can see, unless there is another source of money to support operations, it has to come from the leaky floorless. Add to the normal burn rate the funds needed to launch musicard (we know of $700 K for LL, and who knows how much for the outreach program if it ever takes off, and the training of personnel to man the call centers), and I would not be surprised that there is a lot more of the toxic stuff. The fact that the share count is not going up means that very little additional conversion is taking place. I would not be surprised to see, once the numbers are posted that a big chunk of the recent 22 MM shares additions is 7 MM to to Gordon and 15 MM in exercised options sold into the market (after repricing as was done last time around?), and no conversion.
They never told us before what kind of shenanigan they do with the shares and until I see evidence that Gordon has changed his habits, I will have to assume he has not.
Remember that the bandits do not make very big money on conversion (just 30%) they make big money on shorting at $.1 covering at $.04, and repeating this game few times until they chose their next target like $.02 and so on. Until you have a floor, they are going to play the same game, after all, they do that without any risk to themselves, they are fully hedged.
Zeev |
