Wow. I've been trying to post this to YMB for the last hour. Isn't it ironic that an imporatn legal matter occurs and we are prevented from a discussion? Maybe Jonas is right, and we ARE all minions.
I just spoke with Eric Williams, an analyst on Juan Monteverde's legal team. He explained the situation like this:
The concern is that our BOD has not given us full information on which to act when we vote on the upcoming proxy at the March 27 shareholder meeting. (In a bit of good news, we now know that March 27 is the annual meeting!)
We are being asked to increase the shares of common stock reserved for issuance by 8 million shares. That's 7.5 million to 15.5 million. Such actions COULD have negative impact on the stock price and we as shareholders because of dilution.
Under the proxy, which was issued Feb. 11, there is no indication on HOW the BOD plans to obtain those shares. There is no information obligating the company to say WHY the shares are needed or WHO the shares are being obtained or procured for.
Mr. Williams informed me that normally, case like this have no real effect on the stock. However, on some small cap stocks a huge allotment of shares can cripple the value to us shareholders, and as he said, it's important to disclose all information on who, what and why such shares are needed.
Now, as for me, I sold first and called the lawyers second. An hour ago, I had about 180,000 shares. Now, I have about 40000. I have seen this kind of thing cripple a company, and I want NO PART OF THAT!
But with that, if there were TRULY bad news, I think the stock would already be in trouble, and in fact, the stock would probably have been halted from trading.
Still, if need be, I will buy back tomorrow or next week. For now, I'm on the sidelines awaiting a reaction from the FCEL team.
For more information, contact Eric Williams at 212-983-9330.
Like chi_town said issuing new shares is not necessarily a bad thing, but don't confuse Authorizing with Issuing. To me it looks like a non-event and that is why the shares went right back up. If there is NOT ENOUGH stock currently set aside in the employee stock option plan, then this would be a natural thing to ask for authorizing additional shares in the proxy.
Remember these 8 million shares are being added to treasury stock for the employee stock option plan. Authorizing to increase the treasury stock outstanding by 8 million shares has NO effect on the EPS calculation until the shares are issued to someone.
We all know that FCEL is looking for another partner in Europe. Possibly they are close to an acquisition and will be giving the president of the acquired firm some of the shares as an incentive and have him join the board. Or is the shares are going to management as incentive pay based upon future performance and that could take years to be issued out.
Nobody wants to see additional shares issued for any company unless there is a good reason. But even additional shares could have a positive effect on the stock if for the right reason.
I agree that this is probably a fishing expedition with the result being that FCEL will add a sentence of explanation in the proxy and nothing more. I think we will shortly see everything cleared up with no further effect or worry. Donnie, If you like this company and trust the management, then I think you should consider looking to get back in.
Sentiment: Strong Buy
Donnie sounds like a decent guy with a lot of in-depth knowledge about this company. My personal bias, however, is that I am suspicious about anyone who is so enamored with marijuana that he incorporates '420' as part of his alias name. That makes me suspicious.
Grey - the name came about probably 15 years ago. Donnie - for Donnie Brasco. Bigs - for Chris Noth's character in Sex in the City. And yes - 420 is certainly a marijuana reference.
I live in Washington State where we recently legalized pot. I am 45 years old. I have friends in many social circles who partake and maintain positions of stature in society. I have long advocated legalization because I don't think people like us, who contribute to our communities, should be placed in jail for inhaling a substance that I consider safer than alcohol.
Quite frankly, our drug laws in this country are ridiculous. Another reason I sold off is because my portfolio just hit a record high. Two weeks ago, I bought into the recently emerging marijuana market (did you know there is something called the "420 stock index"?) and took out 150,000 shares of hemp at 7.5 cents per share. Hemp - categorized the same as marijuana - is a crop that has multiple uses in various products including textiles and skin care. It was illegal in the United STates becuase it resembled the marijuana plant. The U.S. House of Reps made a de facto annulment of the law when they added hemp cultivation as part of the 2014 Farm Bill.
I continued to purchase more shares until I had 525,000 at a DCA of .204. I sold out 400,000 between .29 and .33. The company ran as high as .34, when the Senate and the President signed it into law.
Yes sir, I pay attention to FCEL, HEMP, MJNA, HL, SIRI and P. I promise you my sincerity, and hope you will reconsider your suspicions.
At the end of the day - we're all simply trying to make money in the stock market.
Even a cursory reading of the "PR" showed that this is nothing more than a fishing expedition. Unless they get get enough shareholders to sign on to their little scheme, this will just go away. Kind of surprised at the knee jerk reaction...
One other thing to mention. If there was really something to this filing, you would see many other law firms out there trying to make a buck on it. I don't even understand why any firm would bother with this and spend money unless one of the principals is a shareholder and wants more information put in the proxy. The filing doesn't site any wrong doing other than they seek more information.
Sentiment: Strong Buy
- 7 Mils on a 200 Mils stock.... is ridicule diluition (it's also "diluited" in time as well)
- about how and when getting those increased stock incentives..... we'll see an amendment soon.
Nevertheless, I can understand Donnie, because of his bigbigbig stake.
But in this case I think it's overthinking.
This is food for MMakers.
Buy or hold, at your wish.
Hi. Thanks for taking the time to call the attorney and for sharing what you were told.
Personally, the explanation Eric Williams gave you strikes me as disingenuous. Any shareholder who has questions about how BOD plans to obtain the 8M shares and how they intend to use them can pick up the phone, call the company, and ask. If he or she is not satisfied with the explanation, he/she can vote against the change.
Thanks also to jenny, yankees, and onpphire for sharing their research on the matter.
Donnie-- you needed to hear from the law firm that the issuance of more shares is a bad thing for us shareholders? Really? Always a bad thing or sometimes a bad thing or sometimes a good thing or per the situation can be a bad thing?
No shareholder likes to see the issued # increase without a real reason. So call the company, not the legal fishing expedition. Really, an investigation into what? More shares-- investigation closed.
Oh well, they belonged to you and now they don't--chi
Sentiment: Strong Buy
Chi - Like I said, i can buy back. It was just temporary protection. Lest there be any doubt - I DO LIKE THIS COMPANY. As far as I know, I'm the only one on this board (besides dad.tothill who actually attended the meeting last year. But when you have roughly 1/3 of your savings in one company, t doesn't hurt to step aside. I don't worry about taxes - I have plenty of carry forward from Vitesse Semiconductor from years ago.
Bottom line - you never go broke taking a profit. I don't even know if I realized one this time. I need to re-check my current DCA. But as you all know, I've doubled this thing once and made 50 percent the next time. My portfolio is at an all-time high, and that is worth protecting for a day or two.
So you are saying that you dumped in the neighborhood of $200K sight unseen and now the conjecture from an analyst with a diploma still wet from Columbia (2013) has affirm your "fears" and "suspicions".
I never if ever comment but this is truly featherweight territory here. They do a secondary for 28M+ shares at a discount to market a couple weeks ago and the stock goes nowhere but up. Some "responsible" firm finds an anomaly and there is suddenly something that warrants even a modicum of concern.
Wouldn't want Donnie in my foxhole!!
moose...FCEL just hit a over bought buried on the Full Stoch....sell there would be a prudent pre eranings move anyhow. It should peal back within a week...settle and do it earning blip.
However....this is a Yellow flag...FCEL really doesn't need to spend dollars on defending its board.
I'm not in favor of Stock Option Programs for key employees.....unless the option program is across
the board for all. If 6 figured salary's arn't enough....get another job.
I've shaken hands with Chip Bottone. I've gone on a company tour with Kurt Goddard. I certainly believe in the company but this recent spike came with NO NEWS. Perhaps it was an early pre-earnings spike. Perhaps there will be some big announcements tomorrow. But absent that, $1.64 is an old ceiling, and $1.38 has been our floor for several weeks. Who's to say that $38-64 won't be a trading range for a few weeks? You think my maneuver was paranoid? If it goes down to $1.38 based on today's activity would you then say I made a good trade?
The 2010 Plan is an equity incentive plan pursuant to which the Company may grant equity-based awards to employees, directors and consultants of the Company or any parent or subsidiary of the Company. We believe that alignment of the interests of our stockholders and our employees, officers and directors is best advanced through the issuance of equity incentives as a portion of their total compensation. In this way, we reinforce the link between our stockholders and our employees’, officers’ and directors’ focus on personal responsibility, creativity and stockholder returns. Equity incentives such as stock options and restricted stock units also play an important role in our recruitment and retention strategies, as the competition for creative, technical and leadership talent in our industry is intense. While equity is a strategic tool for recruitment and retention, we also carefully manage stock option and restricted stock unit issuances and strive to keep the dilutive impact of the equity incentives we offer within a reasonable range.
Sentiment: Strong Buy
As of December 31, 2013, there were 1,041,267 shares available for future grants. Accordingly, the Board believes that the Amendment is necessary to provide us with enough shares to continue our program of equity-based incentive compensation. As amended, the 2010 Plan will continue to authorize the grant of Non-statutory Stock Options (“NSOs”), Incentive Stock Options (“ISOs”), Stock Appreciation Rights (“SARs”), Restricted Stock (“RSAs”), Restricted Stock Units (“RSUs”), Performance Shares, Performance Units, Dividend Equivalent Rights (“DERs”), and Other Stock-Based Awards covering up to 15,500,000 shares of Common Stock.
The 2010 Plan includes many provisions designed to protect shareholder interests and promote effective corporate governance including:
• The number of shares available for issuance under the plan does not adjust based upon the number of outstanding shares of common stock;
• Options and stock appreciation rights may not be priced at less than the fair market value of our common stock on the grant date;
• Re-pricing of options and stock appreciation rights requires shareholder approval;
• The 2010 Plan requires a minimum period for ratable vesting of options, shares of restricted stock and stock appreciation rights of three years for all time-based awards not issued to directors and one year for all performance-based awards, to the extent such awards may be paid in shares of our common stock;
• Material amendments of the 2010 Plan require shareholder approval;
Sentiment: Strong Buy