here is my comment with respect to >>those who caused this disaster<<.
I thought the terms of the financing were quite favorable. The conversion price was more than reasonable, and if the market pullback (and the fed) could have held on a couple of months, things would be looking rosy for our NKC. The stock continued to drop after the announcement on the 5th because it was now questionable whether the financing would be feasible, given that the stock was now just above the conversion price. The market is generally very swift to punish low cash situations, and that's what happened.
The company still has the credit line with Merrill Lynch , and the US1.5 million credit facility they announced on May 5th. They only have to make it till sales pick up in the fall, so if the stock doesn't recover, they can probably get away with a small financing and minimum dilution. The stock IMHO is oversold at this point.
The cash crunch has undoubtedly come as a result of the last few title acquisitions. So the question is, do you pass up the titles because you don't have the cash, or do you grow the company? I support their actions.
Hopefully the risk pays off, NKC makes it to year end, achieves fantastic sales, and I'll buy pints after the next AGM(which I will be happy to email you notice of). If they go broke,,,,well, at least we have something to discuss. How would you have done it differently, Jim? tj. |
