I see it as GREAT news. First off, it only means that authorized shares will increase from 50M to 200M shares with the extra 150M being put in the company vault. However, in the same breath, ECGI, in that PR, stated they are looking to implement a M/A strategy. They will issue or use those RESTRICTED shares when a deal is consummated. Hopefully, the price will have appreciated by the time the deal is done so ECGI does not have to issue too many of them. The acquired Company Shareholders (I'm guessing they are a Private Companies that want to go public) whom will not be able to sell those shares for a period of time, will surely want the price to appreciate also. I am quite sure ECGI, now that they have turned the corner and are PROFITABLE, would only acquire another PROFITABLE company, that would mean instant growth, and MORE profits to what they currently make. IMO, more and more institutions will purchase ECGI shares as the price climbs. One of them already purchased 985K shares last Q. There is not that many to go around now, only about 17M in the float. Can you even believe that ECGI is currently trading at LESS, yes LESS, than one times their revenues. That is hard to believe or fathom, more so, since they are PROFITABLE. This stock is gonna be discovered by the masses, that I am sure of! Hang to what you have and be grateful you got them for chump change, because .92 is CHUMP CHANGE for where ECGI should REALLY be trading at. In time, you will see what the magnitude of demand for ECGI shares will do to the stock price when supply is limited. Hope this helped.
They could be setting up to be acquired by a larger company as well. I don't know why they ask for more shares but Total Research did the same thing months before being bought by Harris if my memory serves me right, imo. ECGI probably already knows who they are merging with and judging from the stock price the buyout could be about 1.25. That would explain the buyout rumors spread on the board a month ago. The merger could be accretive to both companies and I would hope ECGI would make sure of that in the best interest of shareholders. I would love to know who they are merging with...or what their plans are...
I�m not Super but IMHO I think it is great. Don�t get confused as to what ECGI is doing. They are not issuing new shares to raise money. They are going to use these new shares to acquire or merge with other companies. The float will remain the same therefore there will not be any dilution. If they find a profitable company that will add to there bottom line they will use these shares to purchase that company. I am confident that GG would make sure that these shares that are used to purchase a company would be restricted meaning that they can not be sold on the open market for a period of time. As the price of the stock rises less shares will have to be used to purchase a company. Read the PR regarding this very carefully and really try to understand what it says. I know it is confusing but you have to understand what it is telling you.
The float will remain the same therefore there will not be any dilution>>>>>>>>>>>>>>>>>>>>>>>>That will effect per share earnings if more shares are issued to acquire other company. Isn't that share dilution despite the fact it is not to raise cash? BTW I am long at .91 today.