Dilution21 Sep 2019 14:16
it was very nice to see slowlyslowly making a fairly sensible
attempt to focus on the actual company itself, and what it has
and has not achieved over the last year. i agree with some of
the points he makes, although as per my comments about the
value of those warrants for zark i don't agree they were paying
above market price for shares, when one factors in warrant value.
but what he omitted from his summary was the large additional
*dilution* that has taken place from the sheikh's entry onwards,
and the proposed authorisation for further massive dilution.
i.e. although the share price now is approximately the same as it
was before the sheikh's involvement, each one of the ordinary
share now represents a *much* smaller slice of the aje asset
than it used to, because of all those extra shares & warrants
that have been issued. and they seem to be suggesting that the
company will issue many, many more shares to dilute yet further.
slowlyslowy's points are reasonable, but don't forget the dilution.
***
slowlyslowly: "However, I'm actually of the view that things are not so bad around here. Cut out, for the moment, the chunk of time when the sheikh invested and the price had a little season well above its current level. If that never happened, how do things now compare to how they were before the sheikh put his chunk in? Well, the price is similar, but we have the money that the sheikh invested still in the business. We have a new CEO, who tells us he's working on some deals to expand ADME's operation. We're still here, and with one more lifting will have paid off our investment in Aje. Meanwhile, we have two new investors (PH and ZC), one of whom is willing to put new money in at a premium to what they could get on the open market. So we're not doing as well as we might have if the sentiment attached to the sheikh had worked out, but we're a lot better off than we were before that sorry episode. And, I dare to say, Zark and Peel may prove to be better sources of funding than the sheikh, depending on what strings might have been attached to the sheikh's financial help (we'll never know)."
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