Money doesn't appear overnight. I'm sensing a get rich quick mentality..
Do you know how a business grows? It's either organic growth or accelerated through acquisitions.
Do you know the problem with organic growth? Well i'll tell you - it's ALOT of short term pain. Regardless of turnover, you still need same primary staff/rent and other overheads as a minimum. Guaranteed expenses, no guaranteed timeframe on revenue.
Do you know how acquisitions happen?
Debt or equity. And then you effectively guarantee some form of revenue increase.
I am VERY confident there would be all hell breaking loose if (a) the company paid cash and existing owners therefore didn't have to stick around for to ensure a payday and (b) there was an interest expense for INTANGIBLE asset purchases due to finance. Interest on that kind of funding would quickly bankrupt and therefore it's not a viable option in the developing short-term.
Notwithstanding that, they would need a private equity stake to fund that kind of purchase. Private equity would have some clause for dilution in there if there were any issues anyway. And why would PE fund it when they could just do the lot themselves or engage a t/o?
Tell me - would you rather stagnant shares without dilution? Or growth that, in terms of share value, outweighs any effect of dilution?
QBL Price at posting:
3.7¢ Sentiment: Hold Disclosure: Held
