SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Microcap & Penny Stocks : AmeriResource Technologies (ARET)
ARET 0.00010000.0%Nov 5 1:03 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Gobe who wrote (1152)8/3/1998 4:25:00 AM
From: Mr. Jens Tingleff  Read Replies (1) of 7609
 
Yet another angle on issuing new shares:

If we as investors want to support the company in increasing equity. The way to do it is to hold on to the shares as much as individually possible.

It's much more fun to acquire new business or getting rid of debts by issuing when share-price is 20 than when it's 2.

An example: How to gain 1 mio shareholders equity at an incredible low PE.

Say I owe 1 mio $ - I pay this 1 mio by issuing shares. That is fair and square it is actually equal to obtaining shareholders equity at PE=1 alone for the shares issued.

If I do it at a shareprice of 20 cent(issuing 5 mio shares). Then I'll create a good firm basis there at 20 cent.
If I have to do it at 2 cents (issuing 50mio shares) - Then the one mio better equity will be diluted with every step upwards the share price goes (but not at all as much as you might think).

Now calculating on all shares after issuing:

Getting 1mio better equity at 248mio shares(20cent) = shareholders payed average 0.403 cent per 1$ better equity. (equal to 0.004 PE)

Getting 1mio better equity at 293mio shares(2 cent) = shareholders payed average 0.341 cent per 1$ better equity. (equal to 0.0034 PE)

So you see what I'm saying here is that it's actually a cheap gain one can get by issuing shares - But it is better to issue at the high price because of the base for that price will be supported (thus also enabling more acquisitions).

The above is worth remembering if ARET chooses to get rid of debts premature. We know about this 1 mio due in august from the 10K - we also know that it is allowed to be extended until co is profitable.

Kr
Jens
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News