todays action, page-21

> I was just demonstrating the effect of dilution.

I suspect we're aware of what dilution means. Nobody likes to see its holding diluted. Everybody here would be better off had the company issued less shares at a higher price. Unfortunately the market dictates the highest possible price thus the company had to issue as many shares as it did to solidly finance its operations, give and take a few million. Overall it is my perception that the company achieved very very favorable financing terms. You don't have to look far to find other Australian companies that struggly for any financing at all. GIP might be a good example. In order to survive the financial drought they had to issue 80M shares at one cent. One cent!

Back to the task at hand. You argued the latest financing round was the reason for the share price decline (or its future decline) from $2 to $1.30 or lower. The Creat deal as well as GXY's intention to issue additional shares in another financing round had been announced back in August (25/08/2009). Accordingly the news has been priced in at that time and can not explain a decline in the SP price two months later.

Even if newly issued shares were priced in at the moment of issuance (rather than at the moment of announcement) the calculation would go something like this: 15.10.2009: SP ~$2, shares out ~87M: market cap ~174M. After adding 51M shares at $1.28 we have the same company worth ~174M + 65M = 239M devided by now 138M shares = SP of $1.73.
Applying the same 15.10.2009 valuation, after the Creat issuance Galaxy will be worth 239M + 29M = 268M devided by 171M shares = $1.57 per share.

My point is this: Even *IF* the latest financing rounds were taken into account only at the date of issuance (which is not the case), it would NOT justify a SP of less than $1.57, let alone less than $1.30.