Hi Andy - marin7 from Raging Bull requested that this be posted on SI. Interesting post regarding conversation with Paul Henry:
Regards,
phil.com
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By: marin7
Reply To: None
Thursday, 13 May 1999 at 7:18 PM EDT
Post # of 9232
Spoke to Paul Henry today. He is very accessible and easy to talk to.
Our discussion focused on the current stock price and Robert Gordon's loan agreement in which he can acquire shares at .15.
I told him that I thought TSIG had a great future but the stock was in a downward cycle caused by potential dilution described in the next paragraph.
The stock price is in a vicious downward cycle whereby the lower it falls the more potential dilution there is (ie. stock falls, investors see more potential
dilution, some selling by current investors, less buying from future investors, stock falls further, investors see more potential dilution, more selling than
buying, stock falls further, and on and on).
The reverse is also true. A rising stock price will indicate less potential dilution. (ie. stock rises, investors see less potential dilution, less selling by
current investors, more buying from future investors, stock rises further, investors see less potential dilution, more buying than selling, stocks rises, and
on and on).
The conversation then turned to RG's loan agreement.
He told me that there would be a very slim chance of RG having to loan the company more money but wanted to keep the agreement just in case. Since
most shareholders would like this agreement canceled I suggested a compromise which Mr. Henry told me was the first time he had heard of this
suggestion.
My suggestion was to leave RG's loan agreement in place (just in case) but to change the price in which RG could acquire shares to a price of at least
.30 or .40. This would have (IMHO) a hugh positive effect on the stock because of the following:
- show current and future investors that RG is concerned about the share price and future dilution (actions always speak much louder than words).
- prove to the world that RG is not greedy as many have alluded to.
- immediately lift a large part of dilution cloud overhanging the company
- jump start the stock price so the price could start a rising cycle as described above.
Mr. Henry said he would relay this request to RG. I will check back with him next week but others feel free to inquire about the status of this request. |
