So I took the time to attend the call and I get it. I can't say that I totally like it, but they did make some very valid points. I recorded the call myself, so if for some reason, anyone can't find it at their site or they delete it, perhaps I can get you a copy of it some how.
I need to digest it for a few days and figure out which way I want to vote. Ultimately, their goal is to uplist to the NASDAQ, which would be a very good thing, and this is a very important step towards making that happen.
I think every shareholder who is going to vote on this should listen to the call before they make their decision. I was very much against it prior to the call, and now I have mixed emotions about it, but not completely against it at this point.
I need to listen to the call at least one more time to see if I missed anything.
Well, me personally, I'm done digesting this whole matter and I finally voted today and put my Proxy in the mail.
Right or wrong, I voted NO on everything. I think it is a premature move at this point in the companies history. I think the spit is to large. I also feel that if everything on there was voted yes, it would ultimately put to much power in to few a hands.
The whole point of being a public company is to share the decision making equally, in a democratic sort of fashion. It is all about checks and balances, not letting any one or two persons having all the power.
Whatever happens is out of my hands, but personally I can't wait until it is behind us so we can start focusing on Business as Usual and move forward as an A$$ kicking company. GLTA Longs
For every share outstanding there is one short to cover. The MM's are likely, very much dreading the day that they would have to cover on an $8 stock when it goes to $9 or $10 and there are no shares out there because the float is 1-1.5 million or so. I think this severely handicaps their gameplan and would be their worst nightmare....hehehehe
I pondered this over so much last week, it gave me a headache, so I took the weekend off and tried my best not to think about it, but now that Monday is nearing, I'm back thinking about it again. Just read a whole bunch of what everyone on here has to say or think about it, there are several good arguments for both sides of this decision.
The arguments has been made, several times, even in the conference call about potential new contracts being difficult, do to the "penny" stock status, but what if it was a privately held company with no stock at all, does that make it more or less of a legitimate company? I have trouble with this argument. Any company wanting to do business with us can easily see the RS, and the huge size it was. Will this impress them, I think not, but just my opinion.
Perhaps that is the goal of management, a massive sell off after the split and they swipe up as much shares as they can and take the company private. They mentioned more then once in the call that if the stock price did tank, after the split, they would have the cash to aggressively buy the stock. 1.5 million shares would not be hard to buy, especially if the price really tanked after the split.
The one major bright spot to doing this RS, in my opinion, is the fact that the cheesy day/penny traders would be gone for good. At $5 to $10 a share, it is to pricey for the majority of them to grab a sizable enough position to make a quick profit on a few cents climb. A major plus in my opinion.
On a percentage basis, in the big picture, nothing really changes. A half full cup is a half full cup, doesn't matter if it is 32 oz. or 8 oz., if it is half full, that is what you have, a half full cup. Pretty basic analogy, but I think it sums it up fairly decently.
I still don't think there is a lot of stock outstanding, I see plenty of other companies with well over a billion shares out there, some of them trade 200 million or more shares a day, but none the less, I'm still indecisive as to which way I want to vote. Just thought I throw some more opinions into this extremely opinionated board.
Day traders would certainly not be gone for good. It doesn't matter if the price is 8 cents or 8 dollars, the market cap is the same and the same amount of capital will gobble up the same proportion of the company for a trade. 1.5 million shares would be the same mountain to climb for the company in a buyback that the 150 million are now. As of the last report they have roughly 500k in cash, which would buy 6.25 million shares now or 62,500 shares later, equal to roughly 4% of the O/S. Not a huge amount, and I'd say the cash would likely be better in reserve to provide backup on the increasing payroll through fluctuating sales quarters such as 1Q 2010.
everse splits have often been used by desperate companies trying to pump their prices above $5 to attract more interest from mutual funds -- and sucker retail investors into believing that a higher absolute stock price means a company is healthy.
They don't often work. According to a 2008 study by professors at NYU's Stern Business School and Emory's Goizueta Business School in Atlanta, more than 1,600 companies that conducted reverse splits underperformed the broader market by about 50%, on average, in the three years after the split.
More potential bad news for Citi? April Klein, a professor of accounting at Stern and co-author of the study, said that companies trading below $5 a share before announcing a reverse split tended to do even worse.
Jennifer Tucker, an associate professor at the Warrington College of Business Administration at the University of Florida in Gainesville, said it's a "myth" that big investment firms will suddenly find a company more attractive just because its stock price is higher following a split.
"Although a RS makes sense when moving to another exchange, perhaps this part of the solution seems appropriate because there is no cost."
They can execute the first step necessary for an uplisting (RS) at no additional cost. The higher price gives them increased and more reputable visisbility while they increase earnings to support step 2, which will be an uplisting.
I guess it is because he didn't give specifics and these were not sales (either not going to be, or not yet)
Thanks for the comments on the RS. Although a RS makes sense when moving to another exchange, perhaps this part of the solution seems appropriate because there is no cost.
Wait a second - Bob and Don won't give shareholders an inkling of detail as to their operations, yet they gave an iHub poster significant material information to post?
Wouldn't the potential of $4mm in deals be better presented through standard news outlets PER SEC RULES?
Somebody on the IHUB board contacted Don Andrus about the losing contracts problem, and Don replied that while he couldn't give specifics, there were three contracts of 1.8 million, 1.2 million, and 800k that were in limbo due to the stock price. That's nearly 4 million in revenue, not insignificant by any means.
They really pushed the idea that they are losing sales due to their low stock price, especially large foreign orders. If that's true, then the r/s makes sense.
The CC can be found here:
Anyone understand how that would be true?
Why foreign orders? Is all of this just to make the company appear more legit?
Wouldn't past sales to customers be what matters most to potential customers?
Wouldn't a share price that increased due to INCREASED SALES be worth even more to a potential customer?
I am curious how many shares management will be given as part of pay if if a RS happens.
Again, why did they separate the Reverse Split Amendment from the Share Reduction Amendment? What shareholder would want the former without the latter?
I wish none of this ever happened, and wish things could continue as they were. I have found that giving the benefit of the doubt to something that doesn't make sense never worked for me. If anyone can at least guess at any of my questions, I would appreciate it. I am going to either keep asking until I get a good answer, or sell my shares. Exceptional company, but I wonder about the stock now.