Investor Help (NO Ihub questions)

[cintrix]

Since most penny stock companies do not make money due to lack of revenues they issue shares as a way of financing. Every time they issue large amounts of shares it becomes dilutive and decreases the value of the stock. Sometimes they do financing from outside sources by using CD's (convertible debentures) in which the person lending will get paid back in stock at certain prices or a death spiral financing where they get more shares as the price falls (and they short them because they know they will go down).

I gave up on penny stocks awhile ago due to the above and the promo bs that goes with all of them. So my current knowledge of what goes on may be dated but that is what I know from past experiences.