Glenn,
When I said rate of dilution it was in reference to reg. 144 for the preferred stocks. Until reg. 144 filing, I cannot estimate the rate of dilution.
Lets understand Rule 144:
Insiders are officers, directors, and stockholders who own ten percent
or more of the outstanding securities of the issuer. Members of insider's
immediate families are also considered insider, because they may have acess
to information not available to the general public and they have the ability
to use that information for personal gain. Therefore, there are certain
restriction in the '34 Act placed on their securities transaction in the
issuer's stock, whether they own registered or unregistered shares.
Upon the mandatory filing of Form 144, insiders are granted a 90-day period
to sell a portion of their insider securities. The amount of securities they
can sell is limited by volume restrictions, whether the sales are registered
or unregistered.
Conclusion:
TWT executives holding the convertable preferred shares will have to
file a mandatory Form 144 as we all know, but Form 144 is valid for only
90 days and the amount "they" can sell during the 90 days is limited to
the greater of one percent of outstanding stock or the average of the
last four weeks trading volume in the stock.
Let not associate COGS with fix cost, it is wiser to to associate other marginal changes from gross profit margin changes. We may have substantial increase in sales but a decrease in gross margin. It doesn't impress me when a companies showes substantial increase in sales but as a result has no substantial increase in earnings per share.
I hope we all are keeping an eye on reg. 144 filing. |
