Hi
@Goldwater
I had a similar discussion with SmugLex about this but I am not sure if you saw it. For those that read this please understand I am only trying to point out the reasons why I think the board made certain decisions so please don't get offended if your views differ from mine. I am also well aware that my view of still having 100% faith in the CEO, board and company is in the minority but let me explain why my opinion has not altered.
Firstly I would ask you to read this article which gives a fair balance from both point of views.
https://www.investopedia.com/ask/an...panys-balance-sheet-bad-sign-stockholders.asp
So when you say:
It's the fact this deal was given to her in the first place, over using the massive cash reserves. I believe that it was not a disregard towards the shareholders but merely a2MC were trying to protect the capital to improve growth for the company which in turn raises the SP for shareholders. I hold shares and I am fully aware that they were diluted due to this
however long term I believe I will be in a better position.
So to quote a paragraph of the above reference:
However, increases in capital stock can ultimately be beneficial for investors. The increase in capital for the company raised by selling additional shares of stock can finance additional company growth. If the company invests the additional capital successfully, then the ultimate gains in stock price and dividend payouts realized by investors may be more than sufficient to compensate for the dilution of their shares.
And this is exactly why I agree with their move. I think we can all agree that demand is insatiable at the moment for A2 IF and in my opinion the growth potential is still huge for a2MC. So with more capital a2MC can increase growth at a faster rate. Therefore by protecting the capital and increasing growth faster I will get a better return in the long term SP even if the shares are diluted.
Sure they could take from the capital but then the SP would not grow as quickly as your capital is reduced. The deal may have only been small amounts in the grand scheme of things but it all adds up and if I am right then a2MC will have massive expansion soon enough and will need that capital for growth. I know many people were offended by the move but I saw it as positive because the board must still see a lot of growth to come, otherwise they would have used the capital.
I honestly hope you made some profit from the company before you sold but as a long term holder it doesn't concern me as the SP change in the last week will be rectified as soon as guidance is given and people know the CEO did not sell due to the company having problems.
(20min delay)