Reverse splits
posted on
Jul 11, 2006 04:45PM
Pohl has stated (announced) buybacks - buybacks have positive psychological implications for the shareholder - They convey belief that the company is financially strong, strong enough to generate a sustained rate of income to accomplish share removal from the market in a timely manner. This signals to the investor that the company WANTS to preserve shareholder value, first and foremost and has the confidence to make the statement.
This is what Pohl is signaling to us.
A company considering a reverse may not always be in deep trouble. Still, a revenue generating company may consider a reverse as a more effective way to use LIMITED capital, to ``right the ship`` within a reasonable timeframe.
Companies producing profit, but too low to be efficient in doing buybacks in a reasonable timeframe just might opt for reverses, but are willing to accept the possibility of shareholders being cut by a double edged sword. They`ll do it, but cross their fingers on shareholders being loyal and forgiving enough to allow for rapid recovery.
For Pohl to do a reverse at this point would be catastrophic, psychologically. He`s been around long enough to know the company history, the company image with investors, what he`s doing and what the implication is of any options considered prior to the final decision.
Remember, Pohl commented offline at the SHM that he projected 6 more licenses in 2006. He`s ahead of his projections,agree? he could loaf for 2-3 months and sew a couple up at the end of the calendar year, and STILL make his committment. IMO, the team is ahead of schedule.
The deals closing are household names. If they were behind on closing deals, then maybe I`d be sweating just a little, as would they, since they`d be missing their projections. But that ain`t the case, is it?
I`m betting the farm on his integrity, conservative actions and execution - what he`s conveyed to the shareholder and the rate at which things are progressing.
To hell with the share price as it is today. I want to see continued closed deals. That represents strength. As long as we`re in a strength position, I feel that hand that has fed them for countless years (AKA:We Shareholders) will not be bitten - they`d be nuts to consider anything of the sort.
As long as we stay in this position, the shareprice will take care of itself.
JMHO
Regards