This WSJ article sums it up well, I think:
Yes, that is a good article. I like this point early on to show the scope of the dilution and reversing:
“And when 1.68 million of the company’s shares held early last year equal exactly one share today, well, what is going on?”
Basically, they reverse split down to somewhere around 5-8 million shares outstanding. Then dump another 20-30 million (or sometimes more) shares on the market via Kalani. Once the price settles back down around $1 per share after the dilution, they do it again.
That’s stock based comp for an astounding 54% of revenue! Fifty-four percent of revenue!!!
I tried to warn about this about a year ago on my old account when everyone seemed to get so excited. It fell completely on deaf ears. Some here were just way too over excited about it and didn’t seem to care they had over 60% in SBC… Oh well I am glad people here finally figured this out…
I had a lot of dumb luck with HDP after reading about it here, buying around 9 and getting out (thank you!) a little below 13. This and SNCR (where I lost maybe $20 - not per share - literally $20) should convince me to do a little more digging before placing an actual order.
But mostly, people here have turned up some gems, and probably less volatile overall than MF, and with advice to get out while the getting is good.