Tuesday, December 02, 2008

"for whom the bell tolls, it tolls for thee"

You know things are tough when shareholder letters quote Donne. This is just the beginning of a sobering letter written by the executives of TINY to their shareholders yesterday:


"No man is an island, entire of itself; … and therefore never send to know for whom the bell tolls, it tolls for thee."

-John Donne, Meditation XVII from Devotions to Emergent Occasions

In June of this year, just before the end of the second quarter, we raised additional equity capital by placing 2,545,000 of our common shares at $6.15 per share (stock was $3 the day they sent this letter), for net proceeds after all offering expenses of $14,383,497 (They are essentially saying they have a sweet profit on their self short). Upon the announcement of this registered direct offering to financial institutions, we received a fair amount of criticism from shareholders, even from some of our long-standing shareholders. Some expressed their opinion that we should not have raised additional capital at all, given our debt-free status and our relatively large holdings of U.S. treasury securities prior to the offering. Others objected to our timing, wondering why we did not wait for the stock market to improve, as June of this year was the worst June in the U.S. stock market since 1930. Although we had no idea at the time that June's market tremors were just a prelude and that the world financial system would collapse in the third quarter, we raised that additional capital at the end of the second quarter because we have always believed in maintaining a balance sheet with a margin of safety."

Reposted rock blog.

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