Some further clarificantion on the relative values of ESVS and ZULU:
Nobody "sets" the ratio in the stock swap. A merger is just that. The number of shares of ESVS you will get for each share of Zulu-Tek if the companies merge is an easy formula:
n = E/Z
Where E = # of shares of Enhanced
Z = # of shares of Zulu-Tek
(With possibly an adjustment based on warrants outstanding and covertable debt.)
This won't change, unless one or the other company issues stock, which, of course, will affect valuation.
There have been naive comments here from time-to-time asking if ZULU holders will get 1 share of ESVS for each share of ZULU. How could they? There aren't that many shares of ESVS. Sure, they could issue enough shares to do this, but then that would devalue ESVS so that the net effect would be the same.
Do the math. You'll see why ZULU is dropping.
The ideal trade is, of course, a spread of short ZULU, long ESVS. But we can't do that, because we can't short ZULU.
For ZULU to stay where it is, ESVS must go up.
For ZULU to go up, ESVS must go up a lot.
If ESVS stays put, ZULU must drop.
If ESVS drops, ZULU must drop a lot.
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