Charles, Equity Capital
From the press release: "Under the terms of the agreement, TAMSCO"S shareholders will receive other consideration and will
own 66% of combined entity on a fully diluted basis with 34% balance owned by current SSGI's equity holders and the investor(s) providing, the required equity capital."
Hypothetically:
Assume a final number of shares outstanding (whether in float or
not) of 10 million.
Tamsco = 6,600,000
Previously outstanding = 2,250,000
Remaining balance = 1,150,000
Somehow Tamsco and SSGI have to raise 8.5 million with only
1 million in stock remaining or roughly $ 8 1/2 / share - a rather large
premium. Maybe they will use warrants or options? Either way -
a company with projected revenues of 40 million must raise 20%
of those revenues in equity.
Coming back to shares outstanding. If 10 million and say the
combined companies make 1 million net profit, that is only 10 CENTS
per share. Even with a PE of 20 that is a $ 2.00 / share price
fully valued - and no one is going to fully value the stock until
the unknowns in the previous post are revealed and the merger
is completed.
I am not being negative - just trying to be realistic and recognize what we do not know and what the major factors will be in determining a fair price for the stock. Right now I plan to wait - KNOWING THE RISK -
becasue if the equity is raised, and the merger is completed, and the
company projects some profit for the first year, I believe there is the
possibility for a 300% return ($.5 to $2.00).
AND finally Malcolm says the stock will be a WINNER.
Please feel free to comment on the above - they are my thoughts and
everyone sees things differently.
ComSolut
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