Ginn,
This being the stock market where friends of friends work at Syquest and buyout rumors are nonstop, you will probably make a lot of money on SYQT. However, as to several of your points you mentioned...
1. Investor will not demand that much at this time as long as company can make money. If company issue more shares after positive earning, then investors will feel their profit was shrinking to 1/2.
If Syquest issues the shares proposed in the proxy it will eventually devalue current shares. Regardless, of whether they are making or losing money. Still, you are correct. Most investors probably don't realize how much their share value could be deflated.
2. Company need capital to run the company and paid off the debts from the creditors. I am sure if company did not see the potential of company then it is just the waste of money. And by doing this, company can save on interest expense. As long as investors make sure company did not waste money, then anything to promote the company and product are always the good sign.
So, are you saying ...
That lenders won't lend Syquest anymore more money? Yet, Syquest feels that more money is good? And, that the only way they are going to get this cash infusion is from new investors? Which, by the way, saves Syquest interest on a loan they can't get anyway? And that as long as these investors oversee the financials so as to assure that no money is misused by Syquest, then every thing is just dandy? Did I miss anything? Perhaps I missed your point, feel free to clarify it.
3. Company ask for issueing of incentive stock plan to employees and executives. This is also show the positive sign.
Syquest management claims that the proposed stock incentive program is to attract and retain high quality employees. They go on to say that the current stock incentive plan just doesn't have enough shares allocated to do this. But then the new plan is split 7% to employees and 93% to executives for the first year? Why should management receive so high a split before they have proved themselves? IMO, this is a big *RED* flag!
Regards,
mark_b
PS. Anybody know how many of those 35 million shares in unexercised warrants were still unexercised after Friday? |
