Using the non-novel SkunK method of taking the numbers in the last known dilution (3Q) and using that formula to estimate today's OS, the SkunK guesstimated 4M shares were added to the public kitty in December. (Explained here: http://greenshift-gers.blogspot.com/2009/01/dilution.html )
Using this same method of first subtracting out the expected daily average (150K), then taking 70% of the result, we end up the following dilution estimate for January:
37,153,589-(20x150,000)x(.70)=23,907,512 shares of estimated dilution in January.
In the last shares OS report filed with the SEC, we see that on November 19, 2008 - we had 89,809,764 shares outstanding. Looking at the volumes it seems to the SkunK we had no meaningful dilution at all from the time of the report till the end of November. We estimated 4M shares in December. We just came up with 24M shares in January for a total of 28M.
According to these rough estimates the SkunK sees us finishing the month of January with about 118M shares OS. In a worse case scenario, where every single share sold above our long term daily average was dilution, it would put us at about 126M shares OS at the end of January. SkunK's estimate puts us at 23.6% of our corporate limit of 500M possible shares outstanding. The worst case scenario I just outlined puts us at 25.2%.
Continuing trends
As the SkunK noted in the December Volume report blog, instead of Knight gaining market share during higher volume months as in the past, Knight lost market share in December to UBS Securities. This trend has continued in January. We now see Knight with only 51% market share and UBSS moving up to 39%. With the table below we see this amaizing trend:
Who is buying these Shares?
Knight losing market share to UBSS may well mean we have a new player in the market. As readers have asked me in emails, do we have someone accumulating shares? Why have we been able to add maybe 30% to our OS in a few weeks and the price, although low, has not collapsed? Why have we not made new lows under the weight of all of these shares?
One answer is we have new money using UBSS to accumulate these new shares mostly at the bid. Slowly, Smartly. Could it be GE acculmulating before the deal? My first reaction is no, since I would expect a more ham fisted approach. Throw a million dollars down and see how many shares you can buy on the way to the moon. Plus I would expect a filing after 5%? Could it be an investment group who follows GE around? Taking GE's DD to the bank? Somebody knows, but no one in front of my keyboard...
Another answer is we have is 300 Joe twelve packs (to coin a term) dropping a couple thousand each just to see what happens. Trouble with that theory is you would expect to see a market maker like E-Trade take a jump in trading percentage, rather than the 3-4% they have steadily held over this same four month period.
Who is selling these shares?
The easy answer is YAGI. They have convertible debenture (CD) loans with Greenshift. If Greenshift does not make the $250,000 dollar payment at the beginning of the month, YAGI is issued shares using a predetermined formula. The agreement states they cannot accumulate more than 5% of the shares OS, so they could not wait to sell even if they wished. 5% of a 2M dollar market cap is only 100 grand. Taking the SkunK's rough estimate of 28M shares dilution during December and January - at a .018 cent average - that is $504,000 - roughly two monthly CD payments to YAGI.
In any case, if you are looking for 'revelations', I heard that is a chapter in The good book. All I got here is guesses based on what I find looking through my rose (or is it rosé?) colored glasses. I think it would be a fair critique to say over the last year I have consistantly overestimated future dilution AND share price, and underestimated gross revenues.
As always, do your own DD and make your own decisions. Final investment decisions and shaving with a straight blade are near the top of my list of 'best not left to others.'
Good Hunting,
SkunK
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