Freeport-McMoRan (FCX)

[eddy2]

This is what I’m taking about. An issue will go stale if it is allowed to drop to far below its base line.

It would be the same as having an ad up on a product where the product doesn’t move off the shelf.

In this particular case when it is equity the equity is transformed into on the shelf product. There is an administration fee associated with that has an attached interest fee in the way of dividends granted for the hardship of not being able to trade.

This interest or dividend can be put into a trust to be released at a time that is appropriate pending market conditions. For every share layed in trust due too an issue going stale a goodwill of 10% can be generated and resold into additional shares.

The ten percent is only a estimate set by goverment.

An example is let’s say a share on a IPO release came out at a $1 “ fair market value” . The share driven by demand goes too a $1.50. The company can sell shares at a value of a 1.50 but must dilute all the new shares by forward splitting the issue. If it should go the other way the shares will be reversed split to protect the down side of the original offering.

The strike price is always protected by the capital markets volatility but not by the stocks performance or the companies performance. This is very important to understand. Moving an issue from a New York exchange to are lessor played exchange can sometimes have the same effect.

If a company does move to a lessor regulated exchange there expenses are often much less because of the brand the lessor exchange demands for its listing so you will get a spike in profits and again if investors are savvy enough with the numbers will run it again shaking the not so savvy out of the game.