Pure speculation on my part, but there's another plausible explanation for the mysteries going on lately with GMGC (the out-of-date web site, etc.) which I don't believe has been discussed here yet: i.e., a pending stock offering.
Management could be busy working with underwriters and in the process of a major web-site overhaul with new bells and whistles to appeal even more (than the current site) to potential investors. Think about it . . . with the stock way up recently, what better time to bring an offering? The company could accomplish several things: 1) by selling, say, 10-20 million shares at $5ish, GMGC adds $50 million-$100 million (minus underwriter fees) to their coffers to bolster liquidity and fund their ventures for a long time to come, dispelling any lingering concerns over their financial position (which now looks pretty solid anyway following the GM deal and the other potential revenue-producing services of the company); 2) the offering would provide an outlet for other recently registered (convertible) holders to convert and sell if they wished; in today's market and with all of the compelling things going on at GMGC, the company would have no trouble successfully selling a ton of stock, assuming the underwriters did a competent job; and 3) the offering itself would raise a lot of public/investor awareness of GMGC (something their internal PR effort has yet to accomplish) as the underwriters marketed the offering. As in other offerings, the equity analyst of the lead underwriter would no doubt initiate coverage of the company with a Buy rating shortly after the offering, and the secondary underwriters' analysts usually do the same. This increased exposure and sponsorship of GMGC would do wonders for the stock. Of course, if an offering were announced, the stock would likely trade down somewhat and then linger until the deal was done. But the long term benefits of an offering could be dramatic.
Anyway, all of this came to me in a dream last night (seriously!), so take it with a grain of salt. It's just another (albeit low probability) scenario.
See ya
equityanalyst |
