I'm not an expert on shelf registration rules, but I believe that, if your float is under $75MM, then you cannot issue more than one third of the shares in your float for a 12 month period. With 20MM shares in their float, they would be way under $75MM and therefore subject to this rule. A third of the float would be ~6.7MM shares. Assuming they issued the maximum allowed, then this theoretically would result in pre-existing shares being worth 85% of the pre-existing price after the issuance (per my quick calc). With that said, they may never issue shares under the registration, although that is unlikely (I think it only happens with ~20% of shelf registrations).
If what you say is true, would that only apply to the issuance of common stock? How about preferred, warrants or other stuff?
"shelf registration statement on Form S-3 with the United States Securities and Exchange Commission ("SEC"). Following its effectiveness, the shelf registration statement would allow Global to offer and sell, from time to time, up to $300 million of common stock, preferred stock, depositary shares representing interests in preferred stock, and warrants or any combination thereof"
There are two weasels in the hen house here, Prakash Verghese and Richard White. They are both selling off company assetts and lining their pockets and secured by emplyee agreements. Richard White has let Prakash run the company rumor on the street) and is relaxing, waiting for his severence pay. If you read their Bio's it says a lot, Richard has retired (refired maybe) three times in the last 10 years all with probable good payouts. Who takes a job and retires after six months. Prakash has on his Bio that he was employed by Anderson and also Lehman, and it is not listed but he did work for Enron. If he is trying to break Global, he definately has worked where that has happened in the past. This looks like a last ditch attempt before bankruptcy.