I think of real importance here is the 3.5 million shares that will come into the market. This is a 28% increase in the float(from 12.5 million to 16 million), and it will provide alot of relief to the short position, which is rather large. With this news out I would expect to see the shorts make yet another attempt to drive the price lower.
Also, keep in mind that the delayed convertable preferred is going to be rolled into another convertable preferred, that will ultimately be converted into many millions more shares of common stock. They are just delaying the inevitable, and paying a huge amount of cash incentive away for the preferred holders to delay their conversions. Thats money out of your pocket, the current shareholder.
No details on how high an interest rate will be payed out on the 10 year note, or how they plan on servicing the debt , given the company has no plans on generating any revenues for 3 years......looks like borrowing from Peter to pay Paul, IMHO.
Remember, CDRD has 200 million shares of stock registered for eventual distribution. They did not register that much stock NOW, just to issue these 3.5 million shares. Its all coming out, its just a question of when...........;^) |
