Posted: Tuesday Aug 25 7:14:59AM 2009
The very simple answer to this complicated scenario is that I use diluted shares outstanding in all of my basic calculations. Normally I use basic shares outstanding to calculate the meaningful ratios while allowing about 15-20% in dilutive shares without too much extra attention. If there are is a very dilutive number of options/warrants/preferred etc then I will typically use the fully-diluted number of shares when doing calculations. In the case of Boyuan, I am basing my eps and other calculations on the number of basic shares (which is what you are buying and selling in the open market) plus all preferred shares. This will give you an accurate reflection of how the common shareholders will be treated in the various scenarios you outlined.
Posted: Monday Aug 17 9:28:36AM 2009
Thanks, Doren. I stand corrected on the share price issue. I look forward to the remainder of your reply.