Dear Coy,
That's a good question. The only thing stopping them from further diluting the stock now is the price is so low. I think you are right, if the reverse split happens and the stock appreciates, they will probably issue shares to gain cash even if their games are selling well. They might do this so they would be in position to purchase more games to publish, or just to raise cash to pay of long term debt or give them more breathing room in the future. They were very proud of having 47 million in cash at this time last year. If they get back to 30 million through games sales during the course of this year, and the market cap of the company has appreciated significantly from where it is today, I think they very well might dilute the company again by issuing more shares. But it seems to me that is a long way off, after several good things happen this summer.
What do you think this quarter is going to look like? I expect it to be very bad, the only saving grace perhaps being M-1, but that hasn't mastered yet, evidently. Have you heard how Duels is selling? Has Worms2 made a significant impact in the US? Is Ultimate Race being talked about positively in Europe? As I've said, I'm in for the long haul regardless of the answers to these questions, but having an idea of what to expect in May's numbers would help a great deal in deciding when might be the best time to average down.
Best of Luck,
Snake |
