From what i understand ,if an offering of $8 to $10 million dollars is made , be it to actual shareholders or another party , the result for those unable to participate will be the equivalent of 2:1 split approximately since the offering is about half the actual sharevalue around $18 million .

The higher the price will get before that happens the smaller the split most of us will suffer .

Anyway i look at it dilution seems inevitable , the question remain how will common shareholders be treated afterwards ? and what will the new owners ... do with it ?

It's my opinion that most of us won't participate to the offering in any meaningfull manner for various reasons whatever plan wins .

I believe the actual board, and Pala know that .

So in one case a few fortunate shareholders or a third party will take control of either 50% to 60% of the company if Pala's $8 to $10 million offering wins .

Or in the second case a third party ( bank or other investment firm )will through private placement or dilution through common shares offering , take control of about 11% to 20% of the actual company , if the board's plan of injecting $2 to $3.5 million goes through .

In the first case we see our shares practicaly being split 2:1 and lose total control of the company"s destiny while having to rely totaly on Pala's interest in dealing with the company after they scrap the shareholder rights plan .

In the other case we see the value of our shares go down possibly another 30% to 40% depending on conditions while the destiny of the company resides in the actual board's hands .

To put this in perspective we must remember the actual conditions of the diamond market , for instance DeBeer's has itself reduced production by about 40% so far this year , and it has serious debt problems following heavy borrowing last year or the previous one ( see some of the previous post here)

Harry Winston has also greatly suffered , earlier this years it lost nearly 93% of it's value before Kinross took a 20% stake in the company ( see HW hub ) and it also reduced it's production and may shut down production totaly in late summer and in december depending on conditions . Yet it's share has since tripled following the Kinross deal .

I'm no expert so i won't venture any further but i know some other diamond producer have both suffer greatly and regained since , it depends on specific conditions .

I reported here today the following article ( Economic Meltdown takes toll on diamond exports in India ) and also previously another post about the situation in Russia that has a large surplus in inventory and also not long ago that DeBeer's like India is looking at ways to market diamonds in the middle east trying to create a market that could compete with gold , though it's quite some ways from there .

The point is the diamond market is at a turning point and Rockwell is caught in the perfect storm so to speak , because of the global economy , the special situation in South Africa's black empowering as discussed earlier last week end by RBC investment and the special conditions affecting Rockwell itself , whatever the outcome with the special board meeting those challenges will be hard to meet , yet with appropriate guidance and a little luck the company could be seen thriving by the end of the summer and i hope my shares will reflect that 'cause i believe this company to be worth 10 times it's actual value like many other assets be them banks ,gold , diamonds , base metals and many others .

I don't believe the markets have regained the part of the value it lost in overselling since last year , i don't mean it should regain everything , that would'nt take into account the reasons that created the loss of $40 to $60 trillion in shareholders value as some evaluate it , but a good part of that was sold, out of panick and that part whatever it is as not yet been recouped as it should .

And don't make me say this crisis is over that's not what i mean but it will linger and markets will still gain and lose and gain while slowly climbing and maybe it will crash somewhere down the road because it's been fragilised or maybe it won't who'se to say ? But in the meantime i believe substancial gains remain to be done and Rockwell in particular is slow getting started and should get it's fare share of gains over the next few months if all goes well.

Tectol