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CryoLife Inc. Message Board

  • dlhild Aug 23, 2010 7:09 PM Flag

    SGA's Definition of "Dilution":

    SGA likes to complain about Medafor shareholders having been diluted. His reasoning seems to go like this. Medafor has issued additional shares. Additional shares constitute dilution. Dilution is bad. Therefore, Medafor's management is bad. End of story.

    Some comments now regarding SGA's apparent reasoning:

    First, he does not comment on the specific circumstances surrounding the issuance of shares at Medafor. Much of the dilution he talks about had nothing to do with current Medafor management. They took over a balance loaded with embedded dilution via existing convertible debentures put on the balance sheet by previous management. So simply put, SGA is trying to pin the tail on the wrong management group. The subject of dilution at Medafor is far more complex that SGA has ever suggested. This brief discussion covers this point well enough for now.

    Second, SGA acts like Medafor management is bad, while CRY management is good. Let's take a closer look at CRY management, using what seems to be SGA's definition of "dilution".

    2003---19.7 million shares fully diluted
    2004---23.0 million shares fully diluted---WOW 3.3 million new shares
    2005---24.0 million shares fully diluted---WOW 1.0 million new shares
    2006---24.8 million shares fully diluted---WOW 800,000 new shares
    2007---27.0 million shares fully diluted---WOW 2.2 million new shares
    2008---28.4 million shares fully diluted---WOW 1.4 million new shares

    It appears that CRY has done quite a respectable job of consistently diluting existing CRY shareholders, all under the guiding hand of SGA.

    Now let's look at some CRY stock charts.

    Are any of you starting to see that SGA, and his loyal soldiers, seem to do better than existing CRY shareholders? Is SGA even meeting his fiduciary responsibility as a Board member? You be the judge.

    Third, buying back $1.5 million in stock per quarter, at $5.50/share, equates to buying back 275,000 shares per quarter. However, coupled with this SGA, and his loyal band of soldiers, issued themselves a ton of new $0.00 shares, see attached link.

    It appears that the buy back money, $1.5 million per quarter, is more or less going straight back into the pockets of SGA and his loyal followers, while not visibly benefiting existing shareholders. You be the judge. Could it be that SGA runs CRY more as a private corporation than as a public one? Could it be that SGA is not the great manager he proclaims himself to be? Again, you be the judge.

    The question that all of you as CRY shareholders should ask yourself is whether what SGA is doing will help you as an existing CRY shareholders.

    I think SGA knows exactly what he is doing. I think SGA is a genius when it comes to looking out for SGA. However, when it comes to looking out for CRY shareholders generally, I think the stock charts speaks for itself.

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    • The ton of shares you speak of is about 78000,thats more like a kilo!What a SHILL!

    • Curious then why do you think the stock is a buy under 5? With the overall market pullback don't you think there are better priced stocks with better management, visibility and value?

      • 1 Reply to tkb72ct
      • dlhild Aug 24, 2010 7:49 PM Flag

        Short answer is YES, there are better opportunities elsewhere. However, since I follow CRY closely because of my Medafor investment, I'm will to trade CRY once in a while.

        As stinger once stated, CRY holds quite a bit of cash, they have positive cash flow, and a person can buy the operating piece pretty cheap sometimes.

        Good question though. I may have to re-think why I do it.

        Better places to be are GLD, SLV, PALL, IOH, SLB, CAM, NE, EVS, DO, MOS, KOL, ANR, BTU, and the list goes on. Basically, buy hard assets that in the international arena convert back into more dollars, because ultimately we need dollars to buy groceries.

        Dollars are a fiat currency that has questionable value. Did you know that the only reason that US treasuries are rated AAA is because the government can print money...that should help you sleep tonight.

        Be careful, I expect far lower valuations over the next several years.

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