a better take on current dilution

It is obvious one of the most common complaints on this forum is that the Company is constantly diluting the shareholders. Yes dilution is terrible because it lowers the value of a fixed investment. HOWEVER I THINK WE SHOULD CUT THE COMPANY SOME SLACK ON CURRENT DILUTION - IN FACT WE SHOULD COMPLETELY RETHINK IT. Perhaps we should think laterally, and CONSIDER these points.

1. Dilution mainly occurs by big investors receiving shares in exchange for providing essential money the Company needs at this time, prior to achieving future income via volume sales of product.
2. Therefore, DILUTION should be seen as a GOOD THING at the moment, because without money coming in the Company is finished, and shareholders immediately lose everything.
3. Thinking back to 2003 the Company had a register of around 440Million shares. A hypothetical shareholder i.e. 'blogs' with 100,000 shares (a reasonable holding then) actually had 100K/440M i.e. had 0.023% of the company's market cap (this % is not affected by the specific shareprice of the day).
4. Now after the Luxinvest/ASOF umbrella deal is bedded next week, the register of issued shares (not counting residual shares in notes) will be around say 13Billion shares. Sure, this is a significant dilution over time, with the latest big lump happening because substantial money is coming in, apart from retiring debt and other things as previously advised.
5. To analyse this a little more, 13B issued shares is 29.5 times the 440M way back in 2003. So the overall dilution of issued shares to next week is about 29.5 times.
6. OK - let's go back to our 'blogs' investor who had 100,000 shares in 2003. Blogs has 3 choices if he is staying in the stock today.

(a) 1st choice he just retains his original investment in NUMBER terms (will be 100K/13B i.e. down to 0.00076% of market cap) and bores everyone on this forum by constantly whinging and bleating about the Company management's supposed 'bad' performance because they 'unfairly' diluted him out of existence.

HOLD it right there in this case 'blogs' is foolish because he clearly does not understand the basics of points 1 and 2 above. If he did understand those points he would NOT be whinging, but rather he would be doing something to retain or improve his holding in percentage terms. Further, he would be contented to do this because he understands that if dilution is happening, then that means the Company is getting in money to achieve its very survival and then forward goals. Period. The Company needs money funds to survive and progress at this stage, and in our scenario it has to do this by arranging placements to big investors - which in turn results in the dreaded dilution. This is not rocket science. And it is actually 'GOOD' management by the Company, because they are ensuring survival, which is in the first interests of shareholders. To put it in KISS format - No money inflows = no dilution = no survival. Doh!

(b) 2nd choice 'blogs' can alternatively hold his position in PERCENTAGE terms by purchasing more shares against the dilution. It's HIS call. To be specific, as dilution since 2003 has been 29.5 times, then 'blogs' can purchase additional shares to increase his MST portfolio holding to (100,000 x 29.5) = 2.95M. As he had 100K, this means he buys a further 2.85M to reach his 2.95M, whereupon surprise surprise he now has 2.95M/13.0B i.e. the same 0.023% of the company's market cap he had in 2003.

In this case, as the shareprice has been at 0.001 for months now, it might have cost 'blogs' the relatively modest sum of $2950 to retain his position and STOP whinging at this whole forum. Now 'blogs' is happy, and the rest of us are happy too, because we knew this all along. It wasn't rocket science.

(c) Alternatively as the 3rd choice, maybe 'blogs' could have decided he actually wanted to 'improve' his percentage position, despite the 'necessary' Company dilution, so he might have chosen to increase his stake above 0.023% to whatever level he was happy with for his circumstances. This could include an extra allowance for future dilution from whatever source, if he so desired. It's HIS call. Good on him. Nobody is a victim here - the truth is we are all responsible for our own actions.

SUMMARY
7. If 'blogs' keeps bellyaching about dilution, he only BORES the rest of us, while PROVING that he does not understand the basics of points 1 and 2 above.
8. While the present 'on the bottom' shareprice is frustrating - it is also an OPPORTUNITY for everyone that is fair dinkum to action either 6(b) or 6(c) above, if they haven't already done it. If you can get your topup fill at 0.001 or 0.002 or even 0.003 dammit, then what the hell are you waiting for? You will never see these prices again, and the sooner we mop up the day traders and anyone else at 0.001, the sooner we start on the next pile, or better yet new investors are forced to start on the next pile. You know the story, then we begin upward shareprice movement, and it is 'game on' assuming good announcements continue.

But PLEASE do not continue whinging about dilution while holding point 6(a) - in the end, that reflects on yourself more than anything else. Remember - no money inflows = no dilution = no survival. Doh! Given the truth that there is an inexpensive SP for each of us to deal with current dilution to our own personal extent - my vote is we WANT money inflow - WITH associated dilution - WITH survival. Think about it. And while you're at it, give the Company fair credit due for arranging survival money 'with' the associated dilution.

Good luck to all.