Zeev: Everytime VLNC wants to draw on that $30 MM line of credit, Berg will get stock (or right to stock) at a conversion rate with a customary discount to the "then" market value (probably a trailing average), this is a floorless, whatever benign intentions Berg might or might not have.
You are quite right. However, though I'm not necessarily defending the company, I think you're pushing the envelope on this one. Berg isn't a hedge fund. It doesn't appear he's interested in extracting his percentage without regard for underlying company merit. Indeed, his history, where VLNC is concerned, indicates he's more interested in a supporting role. This is (as HC indicated) bolstered by recent board member buying, wherein I've got to assume board members openly communicate with each other. Therefore, if I was investing in VLNC, I wouldn't be overly concerned with Berg's most recent efforts.
I'd be more concerned if management had reached an agreement, instead, with another Castle styled fund....
John~ |
