MGT share price, page-9069

I'll be brutally honest, it is posts like this that explain why I'm here. To anyone following the thread, be very, very cautious of someone who tells you "SOI won't matter at all.... they could do a share consolidation". This is incorrect. Let me give you an example, using specific MGT figures. Lots of you say you're here for the long term, at least till the production target date of 2024, if not beyond. Some people have mentioned 2030. Right, well let's wind back the clock and see how MGT would have treated a previous long term holder.

Say I'm a s708 (soph investor) and in December 2011 I get all excited about a presentation done by ROY to the market. The presentation is called "The Razorback Iron Project, Bringing Home The Bacon!" The whole presentation makes the case about it being clean, high grade magnetite, low cost producer, ready to produce by 2014, etc (all the stuff we're hearing now!). You can view this exact presentation here: http://saemc.com.au/archive/2011/11royal.pdf

So, in December 2011 I buy in. I am going to retire on this stock! Only three years to production - wow.

• The market capitalization is $46,000,000
• There are 306,000,000 SOI valued at 15c each
• Through my broker I purchase 3,000,000 of these for $450,000 plus brokerage

I now own almost 1% of the company, which means all being well I have voting rights of almost 1% and would receive 1% of the future dividend payouts in future, all things being equal. I elect to hold the company till production. However 2014 comes and goes and due to market conditions etc, production is nowhere to be seen. I elect to hold on, but I won't put any more money in. Fast forward less than 10 years to today, how does my investment look?

• The market capitalization is now $110,000,000, more than double when I bought in. Great! Or is it....?
• No, there are now 3,144,865,942 SOI valued at 3.5c each
• My initial investment of $450,000 is now worth $105,000
• Plus, my % holding of the company has decreased. When I bought in, my 3,000,000 shares represented almost 1% of the total SOI. Now they represent just under 0.1%.

This is what dilution does to long term holders. But never mind: now the new management are going to do a 10-1 share consolidation, so this will fix everything.

• The SOI reduces down to 314 million - much better. But wait, my my holding reduces down to 300,000 shares.
• Each share is worth 10x though - so instead of 3.5c they're worth 35c.
• So now my holding is worth.... still $105,000
• And my % ownership of the new share register is.... still 0.1%

Consolidation hasn't done anything for me whatsoever. I'm a long term holder, and I've been burned by this stock.

So, be cautious of holders who are here trying to tell you none of this matters. If you're holding for the short term to make a quick buck, it won't matter. If you're a long term holder, waiting till production and beyond (like my soph investor above), then it will matter.

If you don't get it after this post, you never will.