statistics on reverse splits demonstrate that stocks go down after the split...im guessing that could be the case here as Sillerman clears the decks and converts more debt into stock as well increasing share count into the split
they provide a discount to place a large block of shares to attract buyers this incentive helps create support as well for shares going forward
excuse me...i was wrong..they did it the right way...announced it last night and priced it today at $1.50...great job...
it will pop back
they can do as many shares as they want..but they will not dilute shareholders but issuing too many shares thats why they are doing a warrant deal at a higher price....common stock at $1.50 and a warrant to buy stock at $4-$5....great deal lt
they could have completed it at 1.75 or more as stock was trading $2...now they will do it below $1.50....not that savvy but still great for lt shareholders
It is very likely that the company will raise money to support operations of the new businesses they just acquired. As a result they will borrow money in some kind of debt instrument or issue equity. If they sell equity it would obviously add more shares to the total number of outstanding shares and increase the market cap. They most likley will do an equity deal at a discount to the present price during the time of the deal therfore possibly casuing some weakness. However, there are a lot of shorts and non-belivers who would scramble to cover if they rasied a good chunk of cash. If they sold some convertible debt..that would also raise money and crush shortsellers.
there are very few shares that can be freely traded (the float) at this point making tarding very volitile. However, for purposes of valuation...there are roughly 64 million shares outstanding...giving the company at $2.50 a $160 million mkt cap.
been there and analyst for 25 years...there will be 64 million shares after the new deal is completed. 18 million fully diluted now, 24 for McAfee, 20 million for todays acquisition plus 2 million incentives. That is 64 million shares outstanding....does not matter if they are registered or not..that is the float or shares that are able to be traded.
at $2.50 a share $160 mkt cap....
there are a lot of companies that dont make money valued at billions of dollars.....its not that hard to justify a few hundred million...
buying under $2
thats why i owned this at 45 cents and sold over 3 dollars......will be back in soon while dumb shorts get crushed