M Allen,
Perhaps you do not realize that the warrant holders have already paid
.50 per share for each of the warrants they hold. Therefore their
cost basis at this point equals $.50 + the exercise price.
If the price is held at this level until they exercise, their
cost basis is .50 + 1.35 = $1.85
Generally speaking, one would not make an investment intending to
sell it for the same price they paid. These investors bought the
warrants fully expecting to make a nice return. Realizing that
they have held these warrants for some time, perhaps a couple of
years, they would reasonably expect to earn at least 2 yrs worth
of simple interest. Let's use 7% return x 2 yrs on each .50
warrant.... that adds .07 to their minimum expectations.
( 1.85 + .07 = 1.92)
They must also factor into their cost basis any commission
and/or brokerage costs they have/will incur.
Do you think they will be satisfied with only 7%, especially
after having seen FTEL in the high $5 range in the past few months?
I think I would hold out for much more than 7%
I have no idea if the Market Makers who own warrants will endeavor
to hold the price of ftel down until they excercise the warrants
they hold or IF that is within their power. But if they do have
the power to do that, consider the other side of the coin, exactly
what would they like to see happen to the price of this stock once
they have exercised? I, for one, won't mind being the holder of
a stock that Market Makers and their friends have a reason to want
to see it much higher.
I know that if I were one of the warrant holders, I wouldn't settle
for for a pittance of a return on my investment and throw in the
towell at a time when the potential of this company is growing
exponentially through many new alliances and significant progress
is being made on the equipment side of Franklin.
I have zero concern over the warrants held by persons who's best
interest is served in supporting Franklin, it's growth and it's
and future....especially those people who's livelihood/future depends
on Franklin in one form or another. They have more to loose
than we do if they manage their investment poorly or short-sightedly.
Here is another perspective I hope you will consider regarding
the S1 share registration, and 144 filings ....
Any shareholder, regardless of when they ever intend to sell
any of their holdings, would want to have that choice available
to them at any given time. Not because they have concerns about
the company - it is just prudent to have that choice when or if they
ever want or need it. Examples I can think of are an overall
market downturn, personal needs, etc...
If you held a sizeable block of unregistered shares in any
company why would you NOT want them to be marketable securities,
EVEN if you thought this company was the greatest thing since sliced
bread and had no intention of selling in the foreseeable future?
The S1 registration and 144 filings accomplish the act of allowing
those shareholders the same rights as any other shareholder...
to trade their stock IF they decide to....just like you
or me. I know I would want my shares registered at the earliest
opportunity, and I would keep a 144 filing active, even if I
planned to sell zero shares, regardless of the name of the
company.
Some time ago I participated in an FTEL private placement...my shares
were eventually registered..... but did I dump them? No, I still hold
about 95% of them.... just because they are registered doesn't mean
they will be sold...just that the shareholder now has the same options
as any shareholder.
Additionally, I would think that many investors would not participate
in a private placement of FTEL/FNET, buy warrants to be held for
a long period of time, or <especially> exchange the ownership of
their own company for shares of FTEL/FNET...unless they had
seriously considered all of the pro's and cons of putting their
confidence in this company's ability to succeed.
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