My thoughts on this groundbreaking deal . . .
Personally, I believe this could become a casebook study in some M.B.A. finance class, or at the very least become the subject of a Wall Street Journal article. I don't have much time here but will comment as best I can.
This is simply a stunning deal. Remembering that this is a company that will likely show .40 eps, showed groth rates of 75%/81% for revenues/earnings, and is trading at a projected PE of 6 for 1998 earnings. This deal is simply brilliant on several counts.
1. First, all shareholders will own the same percentage shares after the offering, i.e., not dilutive. Because we can all purchase the same amount of shares %-wise, this does not result in anyone owning a smaller percentage of the company. (except, of course, for those that choose not to exercise their rights, but such people will be compensated by such rights trading on the open market).
2. It raises a HUGE amount of cash without diluting ownership. Not only do the initial rights purchases raise a ton of money, but the 3 warrants will bring in a staggering amount to the company as growth continues and the warrants become richer and richer.
3. Just from a flat value-perspective, for $5 I am getting not only 1 share of common (already a 2.625 value) and one share of convertible preferred with a .20 "dividend", but I am getting FIVE YEAR options. 3 of them. Think about that. Even LEAPS (Long-term options) are only for 1-2 year periods!!! The company just gave each and every one of us vested by the record date EXTRAORDINARY LEVERAGE. Assuming that TGSK's future unfolds with continued growth, i.e., 30%+ growth rate, Nasdaq NMS listing, continued acquisitions, etc. Assuming that and that this stock achieves a $20 value, let's see what my $5 purchase today means:
1 common stock $15
1 convertible preferred (converted) $15
1 warrant at $8 would mean $12 gain
1 warrant at $12 would mean $8 gain
1 warrant at $16 would mean $4 gain
Total return is $54 on a $5 investment today. Anyone who believes in the growth and prospects of this company today has been given the gift of all gifts by this company. Not to mention, your money paid for the right is being invested directly into the company to permit further growth/acquisitions.
4. The short position. Well, what more can I say. The shorts can make this as painful as they wish now. Short it down this week PLEEASE!!!!! When the SEC filing hits and Nutstoo's share total eventually becomes fully publicly disclosed, there shouldn't be a hedgie or sophisticated investor that doesn't smell this squeeze a mile away. To be 4 million shares short on a position like this is simply unfathomable. A pure short position of that magnitude is already probably close to a record. With this added leverage, we WILL read about this squeeze in a number of publications IMO.
5. We will be conditionally listed on the Nasdaq NMS. The asset base requirement will now be met assuming the full subscription, a $5 share price maintained for the requisite time and our second outside director. At least this assures us the asset base requirement and makes the NMS possible over the Small Cap listing.
We get a bonus gift with this "unit". The company gets a huge cash infusion to use for acquisitions at no dilution to shareholders. We get an easier access into Nasdaq NMS. The shorts get extra-strength Pampers.
Thank you Colin. Thank you Card. I don't care what any naysayer/basher might throw at this company at this point. Fundamentals will rule the day and this rights offering will absolutely break a very illegal short and permit us to profit even MORE off of this company's awesome growth. BTW, to any bashers out there, don't bother responding to me. I said before that this week I am out of reach. I don't have time to respond nor do I care to. The facts IMO are laid out in front of all to see. I'm guessing about 10% of the people probably can't understand this deal and will simply sell their rights. I'm guessing about 10% of the people probably will get talked into selling by the bashers. And I'm guessing the remaining 80% will not only be exercising their own rights but probably duking it out BIGTIME for the 20% of rights that will be sold. Include me in the group that will bid for those units outright. I will be scavenging up all the cash I can find to buy those rights. Unfortunately I believe Nutstoo will probably outbid me. :)
Despite all the bullshit that I saw late last week and I assume has continued through today, I never sold any shares nor did I ever waver in my faith in this company. Today's plan is a double wow. I truly do believe this exotic offering is going to get some SERIOUS attention and FAST. Best of luck to all TGSK shareholders who have believed in this company's promise. Today was just the start IMO of the rewards we will all be seeing this year and years to come.
GOOOOOOOOOOO TGSK!!!!!!!!
As I said before, I am unavailable for the bulk of this week. So these are my thoughts. I can't respond. I'm sure bashers will take advantage of that. Screw'm. They're already screwed IMO. I did, however, want to take some time tonight to get my thoughts out for those that were wondering what I thought. Please take care and best of health to all!!!
Flightlessbird |
