If I'm understanding you correctly, you seem to be mixing time frames. You talk about the stock dividend as if was decided on after the short situation came up. My notes indicate it was a decision BEFORE the short situation, although the dividend was held up as GIFS worked through the legal and other stuff associated with this bizarre stuff.
Also, selective stock dividends are not commonplace in the press, mostly because the press focused on large and mid-cap companies. However, I have encountered selective stock dividends on a few occasions. While such an act may appear to be unfair to other shareholders, in reality, it has little impact on them in a low float situation like this. My estimate is GIFS will distribute around 100K shares, which in the overall float and among large shareholders is a point or two to the right of the decimal.
I agree GIFS could use more float as it builds to NASDAQ/Amex listing and the attention of fund managers/institutional investors. But, keep in mind this is one action in a series of actions that extend into the future. Too much float too soon does not help the stock price, which needs to go up and stabilize to support listing and draw in big $$ managers.
As it relates to increasing the float, I expect GIFS will do one of several things:
(1) A 2-for-1 or 3-for-1 stock split when the price reaches $15-$20.
(2) Unrestrict restricted shares (I haven't heard whether any restricted shares are tied to performance, stock price, etc. If they are, this is a well-planned strategy. If not, well, there are alternatives like (1).
(3) Secondary stock offering of common stock, or possibly, preferred stock with conversion options and/or warrants. While not an option I'd like to see now, under possible scenarios in the future I can see this as a viable alternative that would benefit the company and shareholders.
And the adventure continues... |
