Breaking News Club Statement

[ColinMorrisWalksOnWater]

I may be confused, but the Club Statement stated it was requested by the Consortium that the share capital in the Club was increased not by Ron.

You are quite right, the statement did say it was requested by the consortium, but the mechanics of an increase in the share capital of a business, has to come from the business itself. Hence the EGM of the club for its shareholders, with the notice to shareholders signed by.................Ron. (post number 88)

 

[Barry.C]

So the first move in the deal by Justin Rees and the consortium is to heftily dilute the value of the numerous Southend United shareholders who helped save the club in the past?

Is that correct?

 

[Colin S]

So the first move in the deal by Justin Rees and the consortium is to heftily dilute the value of the numerous Southend United shareholders who helped save the club in the past?

Is that correct?

Great idea. I am happy that we are not paying cash out against debt. Rather give shares. Southend shares are not actively traded so have only an intrinsic value based on the current state of the club. I also have shares so I will vote yes

 

[Barry.C]

Also if I wondrously held 8 shares and that was miraculously reduced to 2, on the previous agreement I could distribute 2 shares to each of my 4 children, upon my death

How do you then distribute 2 shares to 4 people?

If this turns out like this I wont be giving Mr Rees warm applause in his arrival for his efforts and love of the fans

 

[Danshrimper]

So the first move in the deal by Justin Rees and the consortium is to heftily dilute the value of the numerous Southend United shareholders who helped save the club in the past?

Is that correct?

As you point out, shareholders bought shares to help the club and to be able to say they own a small part of the club.

Nobody bought them for the ‘value’ or as an investment. They have always been worth nothing, diluted or not.

 

[tommy tucker]

Also if I wondrously held 8 shares and that was miraculously reduced to 2, on the previous agreement I could distribute 2 shares to each of my 4 children, upon my death

How do you then distribute 2 shares to 4 people?

If this turns out like this I wont be giving Mr Rees warm applause in his arrival for his efforts and love of the fans

if as i suspect the shares are almost worthless what on eath will your children stand to gain .Only a football club foe there life .If Ron had his way not only wpuld youe shares br worthdiddlt squat .But your siblings woiould not have a football club .

 

[bazzashrimper]

Also if I wondrously held 8 shares and that was miraculously reduced to 2, on the previous agreement I could distribute 2 shares to each of my 4 children, upon my death

How do you then distribute 2 shares to 4 people?

If this turns out like this I wont be giving Mr Rees warm applause in his arrival for his efforts and love of the fans

They won’t make 8 shares down to 2. Your number of shares will stay the same, but there will be more shares, so the proportion of the club owned by each of those 8 shares will drop.

Think of a bag of crisps. You have 8 crisps in the bag. Some one squeezes the bag and breaks up all the crisps. There is still one bag of crisps and the same amount of crisps overall. They are just crumbled and smaller. You still have 8 crisps.

 

[londonblue]

They won’t make 8 shares down to 2. Your number of shares will stay the same, but there will be more shares, so the proportion of the club owned by each of those 8 shares will drop.

Think of a bag of crisps. You have 8 crisps in the bag. Some one squeezes the bag and breaks up all the crisps. There is still one bag of crisps and the same amount of crisps overall. They are just crumbled and smaller. You still have 8 crisps.

Does that still work with Monster Munch?

 

[TheSouthendUnitedRunner]

They won’t make 8 shares down to 2. Your number of shares will stay the same, but there will be more shares, so the proportion of the club owned by each of those 8 shares will drop.

Think of a bag of crisps. You have 8 crisps in the bag. Some one squeezes the bag and breaks up all the crisps. There is still one bag of crisps and the same amount of crisps overall. They are just crumbled and smaller. You still have 8 crisps.

That’s probably the best explanation of what’s going on with this. Even an idiot like me understands that. JR is buying us all crisps, but will smash them up. Sounds like he’d fit in well with where I work

 

[Shrimpergonzo]

They won’t make 8 shares down to 2. Your number of shares will stay the same, but there will be more shares, so the proportion of the club owned by each of those 8 shares will drop.

Think of a bag of crisps. You have 8 crisps in the bag. Some one squeezes the bag and breaks up all the crisps. There is still one bag of crisps and the same amount of crisps overall. They are just crumbled and smaller. You still have 8 crisps.

I think a better crisp-based metaphor would be for your 8 crisps to be taken out of your standard size bag and added into a bigger family size bag. You still have 8 crisps but they represent a smaller proportion of the total number of crisps in the bag.

 

[Mick]

Great idea. I am happy that we are not paying cash out against debt. Rather give shares. Southend shares are not actively traded so have only an intrinsic value based on the current state of the club. I also have shares so I will vote yes

It is of no consequence how you, I or anyone else on here vote.

 

[Leeboy]

mmm…crisps

 

[Strykr]

Lot of crisp talk lately...

 

[annie1954]

They won’t make 8 shares down to 2. Your number of shares will stay the same, but there will be more shares, so the proportion of the club owned by each of those 8 shares will drop.

Think of a bag of crisps. You have 8 crisps in the bag. Some one squeezes the bag and breaks up all the crisps. There is still one bag of crisps and the same amount of crisps overall. They are just crumbled and smaller. You still have 8 crisps.

I will try and work this out using a bag of chip sticks failing that I have some twiglets in the cupboard

 

[BEERMONSTER]

https://twitter.com/x/status/1715670711195304171

 

[Mick]

So the first move in the deal by Justin Rees and the consortium is to heftily dilute the value of the numerous Southend United shareholders who helped save the club in the past?

Is that correct?

Not sure how you dilute the value of something that has no value.

Instead of owning 0.0071% of the club, I will own 0.0022%.

I think this is definitely preferable to owning 0.0071% of a wound up company.

 

[mike101]

Surely the real scandal is our shares will be worth less! :-) less than zero? Sorry being a idiot this is as clrar as mud to me Is it the concortium are trying to get more shares in the club or what Please make it so a persns like me can understand what the hell it al means .

Yes, Is the short answer. In exchange For paying off the clubs debts, the existing shareholders will create a bucket load of shares and give them to the consortium. For existing shareholders in round numbers it means, if they owned 3% of SUFC now, after the 17th, it will be 1%. On the plus side without the consortium paying the debt off the shares would be worthless. the easiest way of looking at it is the existing shareholders are contributing to the debt repayment through the dilution. the alternative would have been a rights issue, which would have been expensive to administer. This path is fair and equitable to all and shows that the consortium is well advised.

 

[BluBayou]

Before a share dilution:

"I own 1% of a business worth £100, therefore my share is worth £1"

After a share dilution:

"I own a tenth of 1% of a business worth £1000, therefore my share is still worth £1"

The club is worth more because of the takeover. It counter balances the dilution of the shareholdings.

 

[mike101]

Before a share dilution: "I own 1% of a business worth £100, therefore my share is worth £1" After a share dilution: "I own a tenth of 1% of a business worth £1000, therefore my share is still worth £1" The club is worth more because of the takeover. It counter balances the dilution of the shareholdings. More than counter balances in this instance, I would say given they were worthless and now they have some value and might even be worth having if the club does well in the future.

 

[Strykr]