|
|
 |
Rich get Richer 3 - LFVN 2 |
 |
1 | |
I posted this short analysis of LFVN in May http://www.liquidpoker.net/blog/viewblog.php?id=972314 , They had issued over $5m of convertible debt that possessed terms exceedingly awful for their shareholders' (us). needless to say I was very bearish on the stock. I expected it to implode on itself at some point because of this bad debt, and likely soon while the stockprice was massively inflated on negative earnings(!).
On the important K-8 form they chose to submit to the stockholders as a *powerpoint* on June 13th ( http://www.sec.gov/Archives/edgar/dat.../000095012311058732/a59749exv99w1.htm )
On the 4th from the last slide, hidden at the bottom of a useless marketing slideshow, they mention how they chose to redeem $3m in convertible debt they had out. In response to this the creditors choose to exercise their warrants and options instead of receiving cash in repayment, resulting in their gain of the rights to 24m shares of common stock at an approx average share price of $.37(!), which traded on the market at $1.80 with 73.5m shares outstanding during this time.
To clarify the bit about the K-8, Wikipedia says the, "Form 8-K is a very broad form used to notify investors of any material event that is important to shareholders" Usually, this is a simple text-only form. They submitted a large marketing powerpoint with the only material event, the redemption of $3m in covertible debt, in a slide near the very end of the slideshow.
Since my post in May, where they were trading at $1.80/share with 73.5m shares outstanding, the stock price has been on a steady turn to $1.20 with 79.3m shares outstanding.
O RLY? HOW U FIG?
Turns out that for every $1m in debt creditors convert, they receive ~8,000,000 ("warrants" for 3,074,844 shares@ $.20/each, "options" for 4,919,815shares @ $.50/each) shares of common stock. So by the end of F11 they will have to finish selling $3m of debt's worth of options and warrants aka
3 x 8,000,000 = 24,000,000 shares.
So far the creditors have sold 6m of these shares, and the stock has tanked from $1.80 to $1.20. According to the slideshow document, "All conversions expected to be completed by year-end FY11". According to their annual report, the company's fiscal year 11 ends on June 30th, 2011. Wonder whats gonna happen in the next 7 days as 18m more shares are "expected to be sold" o_O?
Furthermore, I've never seen these creditors named in their documentation. They could easily be executives within the company for all I know.
/edit
bettered the clarity
critiques in my argument r thx
|
|
| | Last edit: 23/06/2011 04:57 |
|
| 1
 |
exalted United States. Jun 23 2011 04:06. Posts 2918 | | |
don't really understand the post. can you clarify a bit more? did you end up investing in the company? |
|
| exalted from teamliquid :o | |
|
| 1 | |
nah just wanting to document this in mah blog |
|
| 1
 |
palak United States. Jun 23 2011 04:09. Posts 4601 | | |
only 10% of the cells that make up the human body are cells which contain human dna, the other 90% are symbiotic bacteria |
|
| dont tap the glass...im about ready to take a fucking hammer to the aquarium | |
|
| 1
|
egood United States. Jun 23 2011 04:23. Posts 1883 | | | |
|
| 1 | |
ok I made major revisions hope it is comprehensible now |
|
| 1
 |
ManofFire United Kingdom. Jun 23 2011 05:25. Posts 140 | | |
Did you not read the bottom of the slideshow?
"Robust long-growth oppurtunies for LifeVantage"
Your commiting suicide with shorting this stock imo. There's no way this company is going to lose money with there new improved balance sheet... even if they have to create millions of stocks out of thin air. |
|
| 1
|
NewbSaibot United States. Jun 23 2011 09:52. Posts 4946 | | |
Are you trying to get us to invest in something? |
| |
|
| 1 | |
no I'm just enjoying that I made what so far seems to be a correct read, pretty good for an amateur. it'd of been hard to make money on this situation anyway since its a penny stock
|
|
| 1
|
RaiNKhAN  United States. Jul 14 2011 19:15. Posts 4080 | | |
gotta find a way to put money into your analysis is next step imo |
|
| The biggest Rockets, Sixers, and Grizzlies fan you will ever meet! | |
|
| |
|
|
 Poker Streams | |
|
Contact Users: 437 Active, 0 Logged in - Time: 04:14
