Hi John - yes, there are different reasons for dilution and I agree with your assessment. Time and again, I was tempted to average down but decided against it. The Q before, she missed the est. Last Q, she made it but showed a flattening of the bottomline. Now, I confess I am not really a Q2Q investor. I will allow for seasonal variance and all that. 2 Qs ago, the reason was dilution. The same with last Q. 2 Qs ago, I accepted insider selling as a fact of life. But that continued into last Q with an accelerated curve, this makes me uneasy. I understand many people are LT investors and they are still way ahead. However, there are also people like myself who got swept off by her growth story. To this second group of people, the flatlining of the bottom line is another blow, especially for those O'Neil's CANSLIM followers.
That said, of course the company should focus on the business and not to manage the stock price; however, the dilution issue hints that the company is itself shortsighted. Here is how I see it, instead of taking quick profit, mgt could concentrate in maximizing shareholder value. If the stock is strong, mgt can make secondary po to fuel the growth of the company. The rising tide should also help to strengthen their net worth. Instead, the street is unhappy, as indicative of the stock price, b/c it cannot rely on any kind of guidance.
best, Bosco |
