Please forgive my ignorance, however, the issuance of more stock is starting to sound like our federal reserve printing money. Is not the value of common shares diluted every time TALON issues more shares. Does this not require approval of the board of directors. What is going on ?
You have a legitimate question - These are options to buy stock and are being given to the BOD and upper management. Right now the pps is below the option price so there will not be an exercising of the options.
Obviously, once the pps goes up that can change. However, common shareholders account for only about 10% to 15% of TLON's equity so the dilution would not be as great as you may think. The remainder is predominately in the hands of Warburg Pincus in the form of preferred shares. The way WP makes their money is when they liquidate a position, i.e. sell a company. Until then it is unlikely they will convert their shares knowing that they would reduce their ownership of the company.
The question is are these options being given as an incentive to go and consummate a deal or is it a reward for doing a good job for a deal near completion? As a common shareholder all we can do is ride on the coat tails of WP. That is not so bad, they do have an accomplished track record and TLON has a lot of potential.