---REALITY CHECK--- !!!!!BUSINESS 101!!!!!!! Greetings again everyone, I felt compelled to also re-post this to the SI Thread from the Raging Bull Thread with permission from Z.
I have no intention of either getting into any online "personality" fights or starting any. I have mostly lurked the SI and now Raging Bull sites hoping to glean useful information to help base investment decisions. With the current dialog, it is getting harder. Therefore I would like to put my $.02 worth in and maybe stimulate some sane interaction.
I am not a long term investor but have 25+ years in the finance business and base my decisions on that experience. We all base our decisions on the experiences that we have had to-date. Since each of us have a different set of experience, then none of us will always agree on anything. The following is just my opinion based on my experience.
Stock Dilution
A company charter establishes the # of shares that the management anticipates that it will need to accomplish a business plan. They start out by issuing enough to accomplish a goal or phase with the expectation that the value added will increase the stock price making the raising of capital in the future easier. Best laid plans of mice and men. Some times they are right, sometimes they are not. But, financing must continue. Therefore, additional stock is sold to continue growth and hopefully overall increase in value of said company until such time they can raise needed capital from more traditional sources.
What would you think if you went to the bank to borrow the money to build a new house that you anticipated would cost $100,000. You get the house half done and the bank says that they are now only going to allow you the $50,000 you have already drawn but they expect you to pay them the interest on the full $100,000, complete the house on your own to the original specs and you cannot borrow any money from anyone else? What is the chance of this house being completed and livable?
If we trust the management and believe in the potential of the product that is being produced, why should we deny or question a management decision to raise needed capital? If you do not have that trust and belief, then why are you here?
This is assuming the good intentions of the involved management. Yes, there are those that go public with the sole purpose of selling stock to line their own pockets. This is where investor research must come in. After research, do you believe in management? If not, move on to the next one.
And yes, there is always that chance that it is a scam. Such is life in every thing we do. That is what continued research is all about.
Other opinions that I may expand on at a later date, time permitting and anyone wants to hear it.
144 filings
Strong Longs vs Negative Nays
Who and what is an investor
Bottle Feeding vs Breast Feeding(Just kidding)
Z
Best regards,
Bill Fortune III
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