The company needs cash, like all companies do. DRO needs to hold $10M in cash to feel really comfortable and I would certainly want the company to hold that amount of cash. But it currently holds $50M in cash and most of it serves no purpose for shareholders and even with the massive growth that the company has experienced this year it did not need any of the additional $26 M it raised. Furthermore the recent Q3 announcement suggests that the company is now cashflow positive and if it performs even half as well as Oleg claims will be build rather than consume its cash position.
I find the suggestion that management should not worry about shareholder value at any stage of the business extraordinary. All share holders have risked their money on this venture and should expect that shareholder value is the thing that management should focus on above all else. However, they are doing what you suggest and ignoring shareholder value - they sold 15% of the company unnecessarily and gave themselves 4% in the latest round of options. That's nearly 20% of the company gone this year.
If you want to know why sales have quadrupled while the stock price has gone nowhere, you only need to look at this. Who wants to invest in a company where the managers keep giving away or selling off shareholders equity unnecessarily?
As shareholders we are getting hit not just by the dilution but because serious investors who don't want to be in a stock where management fails to protect their interests.
DRO Price at posting:
28.0¢ Sentiment: Hold Disclosure: Held
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