Dan, You are thinking about the same possible solution as I with regards to settling the CC issue once and for all. bgtit has pointed out that SEC rules have been violated in the sale of some of the CC shares and I know that some feel that the best way to handle this problem would be to take this issue to court. This may turn out to be the case, but I have to wonder if it might also open a "Pandoras" box of delays, expenses and problems that maybe would not be best for ourselves or the CC shareholders that want to sell. I would be more inclined to first see if there might be some common ground that could be struck between DCI and the selling CC holders with regards to buying those shares back at some price around where CC sellers have been selling their stock on the open market. Yes, the buyback does still have money in it, but as I mentioned, the company did not really want to use that money to repurchase shares with and there may be good reasons for this that I am not aware of. It appears that the sticking point with this type of solution would be raising the needed cash. One possibility in raising the needed cash might be to complete the already discussed sale of Muller Media. Perhaps it would be possible to strike some deal contingent on the sale of that division which would stop the CC selling immediately and permanently, I don't know, just a thought. I do not think that the option of raising cash via debt offerings or equity would be viable due to SEC regulations restricting how the money for buybacks can be raised, but perhaps this could be a second possibility to explore. There may be reasons that DCI should not or would not look to these ideas as a way of dealing with the CC selling problem but since the issue of a lawsuit has already been broached on this subject, I wanted to offer a second option for consideration that perhaps could work out better for all parties involved. I know that some are more after revenge than in finding what would be the "best" solution for us. I would prefer to approach this issue with an open minded view as to what solution would offer DCI shareholders the most expedient and fair solution without if possible introducing a host of new potential problems. If there are reasons that this or some other solution involving a mutual agreement between the selling CC shareholders and DCI could not be reached, then I would fully support the legal action proposed. I want to mention that these are strictly my own opinions on this as a shareholder. I would also like to add that another solution to this problem might simply appear in the form of a very large amount of new buying. With what is going on with the company at present, I would have to believe that the heavy buying such as we saw last week will continue.
One other solution that has crossed my mind, would be instead of doing all we can to inhibit the sale of the CC shares, that we instead open the flood gates and let them dump at will. In this scenario, our share price would drop to the minimum amount that CC shareholders were willing to accept. The short term effects would be awful for our stock I am sure, but it would do two things:
1. Allow honest DCI shareholders a chance to pick up a large amount of equity in DCI for less $$.
2. Greatly shorten the amount of time that we would have to endure the seemingly endless supply of CC shares. If our share price was $1 vs. $2, it would only take 1/2 of the amount of buying $$ to clean up the total amount of shares to be sold. This example is the centerpiece of why I believe it's important to try and find a resolution to the CC problem while our stock price is already down. As our stock price moves up, the relative size of the CC problem is increased:
If we assume that 2 million shares need to be purchased, either by the company or in the open market: we need 2 million $ to clean this up at $1, $4 million at $2 and $12 million at $6 and so forth.
Opening the floodgates might be a bad idea as it might prevent us from getting listed, or cause other problems, but thought I would toss it out there as food for thought.
If there are comments or other ideas, let's hear them.
James |
