Spoke to TSQD - they "expect" to issue another SB-8 to give register more employee stock options, sometime (?), further diluting our % ownership of DRIV shares.
Float used to be 11 million (last Q), but in March TSQD filed an SB-2 to add more than 2 million more shares through employee stock options, and they will issue another SB-2 to finish registering the remaining stock options so that these new shares can be traded.
They are doing this to prepare for some deal (what, nobody knows) with the DRIV shares. This allows employees to sell their stock options by regsitering them which adds to the float. TSQD does not have an estimate for what the final float will be, but I've heard numbers as high as 15 million.
I do not know when the next SB-2 will be registered, only that TSQD "expect" to only have to do one more. I called TSQD based on today's sell off to $3.25 to see if they could comment on whether another SB-2 is in the pipeline - they could not comment.
WORST CASE, float increases to 15 million, from 11 million, and our DRIV ownership is decreased from 3 million DRIV/11 million TSQD = 27.3% to 3/15= 20%. That's an effective drop in stock price of ~27%, not very nice. So, after subtracting the full 40% corporate tax if the DRIV shares had to be cashed in (again, worst case), and TSQD is only trading at (1-.4)*.2=12% of DRIV. I'm sorry, but 12% of DRIV sucks. We just dropped to 3.25/43=7.6% of DRIV this morning, I bought at 11% of DRIV, expecting to see at least .27*.4=16% of DRIV price.
Keep in mind, these are worst case calculations, I'm still holding my TSQD because I believe I'll see no less than 12% of DRIV price at this point, and I do not any of the worst case assumptions will come true. I'm just concerned about TSQD's concentrated sell-off this a.m., and whether somebody got some news that the rest of us haven't seen yet - hopefully nothing bad in today's earnings. I don't mean to scare anyone, I'm way long on TSQD right now, I hope someone can come up with a happier explanation for TSQD's recent lag. Wouldn't it be great if some fool just decided to sell a ton of TSQD because he needed the money for a new house? Anyone know of any insider selling that might have gone through today? I already checked EDGAR and there are no filings there.
No volume in last 15 minutes, bid at 3.56, in fact it looks like volume just went from 269,600 to 264,600? Has trading been halted? |
