Capital refers to cash or cash-like instruments. The message implies that M is having a problem meeting its cash requirements to keep the business operating...for example paying salaries and bills (electricity, phone service, etc.). They have essentially five options. 1. Reduce expenses (reduce the number of employees, stop buying things, or ask employees to wait a bit for the salary payments 2. Increase revenue (sell more products or services) 3. Borrow cash (from a bank or private lender) 4. Sell stock (this is usually done in large chunks, say by issuing 5-20% more shares in the company and diluting the ownership position of the existing shareholders/owners by that amount).
All of these take time to organize and complete and impact the financial status. A fifth option is to be creative as M has done. In M's case by appealing to loyalists such as ourselves to contribute directly to the company coffers in return for a service (M Club) that is (presumably) low cost to operate. Feel free to contact M directly and ask how you can help. I'm sure they won't be shy in telling you how to. IMHO, I think in the end, M will use a combination of these options, re-focus on how things are done inside the company, and will likely come out of the crisis in a stronger position than going in. They certainly have a good core product. Paul On Tuesday 31 December 2002 06:36 pm, Revenant wrote: > As someone who's never really looked into investment, how does this > Increase of Capital thing work? > > Thanx. > > --------------- Revenant [[EMAIL PROTECTED]] ------------------ > The reasonable man adapts himself to the world; the > unreasonable man persists in trying to adapt the world to > himself. Therefore all progress depends on the unreasonable > man. -- George Bernard Shaw
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