posted on
Feb 18, 2014 11:31AM
Welcome To the WIN!!! St. Elias Mines HUB On AGORACOM
Keep in mind, the opinions on this site are for the most part speculation and are not necessarily the opinions of the company WITHOUT PREJUDICE
Message: 20:1 is a bad deal for shareholders and Must Be Voted Down
I think it's a bad deal and if we as greens can vote to stop it we must. This is my own opinion and this is why I think so:
1. If my math is correct, and I admit I am not sure, then as a percent which is based on 100, a 1:20 ratio the day after the split equals 5%. Therefore you've had your shares reduced by 95%. Think of it another way and you get the same result. Out of every 20 shares you go down 19. That's the same 95% reduction. Not good.
2. The share price, sometime after the day after the consolidation, would need to appreciate to offset the 95% dilution. That is wishful thinking I think. There is no rule that I know of which says the s/p has to go up after a consolidation.
3. You get one vote for every share. In the above scenario your voting shares are decreased by 95% after a consolidation.
Summary:
I don't see any monetary benefit or purpose that strengthens the company and shareholders by doing a 1:20 consolidation.
What I do see, in my opinion, are two other purposes for management trying to do this:
1. It allows people with money on the sidelines, after a consolidation, to buy up lots and lots of diluted shares and for each share they buy, they get a voting share and 51% and more of the voting stock and control of the company. This sidelines the greens and shuts us out.
2. It would dramatically drop shareholder, (green), value and voting shares.
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