To be objective, the issues here are that KK has created so much paper among so many entities, that it is beginning to look like the proverbial shell game. When I was long, I finally got to the point where I thought I understood the plan. I have a lot of experience pouring over documents. I have to say at this point that I have given up, but that I probably know more about the deals than most who are long.
Beyond that, trying to figure out what the final entities will look like, what the capital structures will show, the extent of dilution, etc., is a task that makes uncertainty inherent and, consequently, affects the share price of each entity.
The use of projections for both the subsidiary and the holding company, or whatever GSHF winds up being, cannot be justified. Otherwise, one could just keep creating holding companies on top of each other and sell more paper. There has to be some basic approach and cohesive and understandable business plan for investors to come to the table.
We see numbers, such as those you cited. You've no doubt seen the criticisms that KK has very few actual contracts that are to legitimate 3d parties. Rather he PR's sales from one entity to another in an attempt to mislead. (Not my words but those of critics.)
I'm objective and still contemplating getting back in. I do think that the stock of all the entities will go lower. When KK realizes that he has to be more precise and present a clear and concise business plan to the public, with clear capital structures and accurate projections, then the price of the entities will rise.
In other words, I like the companies and the prospects, but, as is typically the case, the capital structure is the key to any investment. |
