A great post by Bumble! A little calming down from Turr and others. Rants by a few.
Well, I am sorry, I don't think Poet is like any other company you have been involved in previously, and is very different than the vast majority of companies that seek consolidation. I would guess there is more going on here than meets the eye. The balance sheet is very good. There is a solid, experienced Board, including the founder of the technology. The company has hit each and every milestone on their way to TDK's being in the hands of many; feature size at the point where they in discussions with majors; a second valuation being done and to be announced; 20-F filed with SEC; a university agrees to a stake rather than a cut; an insider (SI) buys shares like crazy before he is nonminated for the Board; an industry heavyweight joins the company.
So why on earth would they now tell everyone of a possible consolidation? On the surface it just doesn't seem to make any sense because of the reverse-split stigma. Unless........you have a great card to play.
According to David Simmons of Forbes:
For investors after the tech bubble burst in 2001, the “opportunity was in ignoring the reverse-split stigma and focusing on each situation individually. Still, playing reverse splits is risky speculation, not investment. Most of the price-performance winners are small companies that haven't established business track records beyond recent reversals of fortune, and now also bear an albatross of per-share losses being amplified due to split-reduced share count.”
In other words, when an investor is confronted with a potential reverse split in a company the investor is already invested in or considering investing in, the knee jerk reaction that a reverse split is inevitably an omen of impending doom is unwise but caution is still in order.
Investors should look at the particular company in question, try to determine the reason behind the reverse split, and then decide whether it is an act of desperation or an act made with a good faith expectation of attracting more investors. If a company has realistic prospects of an improvement in revenues and its financial condition, then a reverse split in conjunction with those improvements can be a powerful tool to draw in additional investors.
My guess is all of this is happening because of the second Pellegrino valuation. I think this is why P2 has not been announced as yet. I think it is going to be released soon. Despite the early negative reaction to consolidation, I think P2 will bump the SP nicely. Institutional investors, ones that we do not reach now, will make note and want in. I think the reverse split will happen (maybe not 1-5) and the price will jump again by year end in conjunction with a listing on a major U.S. Exchange...... as those institutions really start buying - especially after they see the new PDA's in place and revenues starting to flow.
All just a calculated guess on my part.
This Board is calculating. Manocha is orchestrating. Play on boys.
