If Friedman is successful, the value of the total awards to him will exceed 0 million.At least million of this will come to him within just the next few months.Throughout this article, please understand that the described reductions in share count have nothing to do with any type of meaningless “reverse split”.Instead, with RH these are actual and permanent reductions in share count which are having a very predictable effect on the price of each remaining individual share.
The September announcement alone saw the share price spike 45% in single day.
What I will describe below is how Friedman is now using a combination of positive cash flow and new debt to further reduce the share count.
Friedman is effectively conducting a “stealth/quasi/creeping” going private in order to drastically reduce share count.
All that is necessary for Friedman to receive this payout is the financial engineering and ongoing reduction of share count coupled with even just very slight improvements in RHs business (in fact, whether real or perceived). Friedman did not waste any time in putting his plan into action.
Within just two days of that award (on May 4, 2017) RH quickly announced a 0 million share buyback to sharply reduce the share float.
There is therefore no dilution until the share price exceeds well over 0.