Cinema,
- Your last question, why not 10/1 or 20/1: I have discussed this point with Bruce and the reasons include: easy math with 50 and to bring the SP to the range $4.00 (marginable) and to attract institutional shareholders...some funds are not allowed to invest in penny stocks.
- To follow-up with the voting requirements post (yesterday). The following scenarios are possible, depending on how CLF (insider) and others (us included) vote. I also arbitrarily assume 50% vote turn-out (other number can be assumed of course). I also assume only the OS shares, ignoring all options and wts (which could influence in a big way the vote results). My understanding (correct if I am wrong) is that the exercise prices are around $0.10. If people really want to influence the outcome they can certainly choose to exercise them at $0.10 which is still way below the expected value of KWG SP. Note: Front page of KWG website shows some 260M wts and options, which is huge if all exercised. For the discussion below I will ignore them (for now). Remember that management recommended a YES vote.
- Test 1: Simple majority 50% plus 1 vote (no management, no insider): Assuming 50% vote turn-out 670 M/2 = 335M shares, 50% x 335M = 167.5M + 1 shares. We have approximately 71 M shares in the share count, and if this is voted as a block, then 71M/167.5 = 42.3% of the requirement for simple majority....quite a surprise, unless i did badly with the math. Other scenarios can be assumed to get other predictions.
- Test 2: 2/3 majority (including management and CLF as insider votes):Again assuming 50% vote turn-out. Two possibilities: CLF can vote YES or NO (I can't read CLF mind).
(a) CLF/YES, Management/YES and us/YES: 148M + 18M + 71M = 237M; 237M/335M = 70% which is greater than 2/3 (66.7%).
(b) CLF/NO, Management/YES and us YES: Since CLF with 148M which is 148M/335M = 44% of 50% vote turn-out the Test 2 would fail if CLF voted NO.
Note:To take a way CLF control of the 2/3 requiremnent, there would be a need to have 148M/(1/3) = 444M on the other side of the balance....444M/670M(OS) = 66% vote turn-out.
Just a few examples to illustrate the what-if analysis that somebody (KWG mangement and CLF) could do. Perhaps, they already have this programmed in their computers to crank out the results using "indications" from major blocks. Please check my math here.
I would leave it here for you to continue speculating.
- Agreed with Cinema that it boils down to TRUST. If you trust management and believe that Frank is doing all this with your welfare in mind then vote YES. Otherwise, vote NO.
goldhunter
