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Finjan Holdings, Inc. Message Board

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  • joschmoe joschmoe Mar 17, 2009 8:17 AM Flag

    Count on $4 million more coming in.

    I'm gonna mention something else here to follow-up on the concepts I mentioned earlier re: Debt Conversion. It's a good thing...but I don't want to put it out there without the disclaimer, first, that I understand the effect that a drop in SP would have. My earlier posts dealt with that, so I'll just reference them, before I begin, for that possibility.

    For this new point, I want to note the "big picture" of the rotations I mentioned in the first two posts on this thread. Presuming the bondholders convert, which I believe they should if the SP continues to show this muscle, and presuming two rotations: one out of any sellable shares to lock in gain and the other out of debt and into equity, here's my thought:

    In a year or two from now, the net effect will have been that the bondholders effected a CAPITAL RAISING for COIN. Although COIN initially gives them shares to pay down debt, they then pass the shares on to retail investors through the marketplace. The net effect that COIN raises $4 million capital, though indirectly. They "sell" shares to the bondholders, who then sell at a profit to retail investors.

    Presuming things take off, as I hope they will, in retrospect (and presuming a much higher SP), the bondholders will have received a great return for placing shares into the market. COIN will have exitted the toughest part of development stage (max construction costs/min revenues) without incurring "bank" debt. When stage 2 hits, i.e. Rhode Island plant, they should be generating good revenue and have minimal debt. Pause here and think about what that means. That's a HUGE plus!

    If the SP hits high enough at that stage, conversion of warrants could do the same thing at the second stage: build Plants 2 and 3, with much smaller dilution.

    I don't want to scare newbies with all this dilution talk. This really only concerns those of us who got in at a much higher price. Getting in at $1-$2, as anyone can now, would be an absolute STEAL in retrospect.

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    • These weren't warrants being exercized, they were discounted shares in lieu of repayment of bond principal. COIN has no money and doen't expect to for at least 4 months, hence the need for the convertible and how that bondholder's purchases were arranged. And you blast Ryder for writing fiction? At least he puts in a disclaimer at the beginning of his posts!!!

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