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Re: Pennyland post# 82

Monday, 06/02/2008 9:43:50 AM

Monday, June 02, 2008 9:43:50 AM

Post# of 98
The company has relatively low volume. The service they will be providing should benefit many. They did private placements at six cents a share over a year ago. Now we'll just have to keep a close eye on them.

There are many ways young companies can raise capital. Most of them are included in the iBox located on this thread. Sometimes a "convertible bond" is a good option since that helps the company with short term capital needs and minimizes their "cost for capital." Those who purchase the bond are guaranteed a specified rate of interest. Then, they can hold the bond or convert the bond into shares after a specified holding period.

Another way a company can raise capital is to do a private placement and have a limited number of shareholders who incur all the risk of the chance for risk of their shares who are usually provided with restricted stock. It all depends on how a company wants to get themselves set up.

Again, it all depends on how a company wishes to move forward and the risk they are willing to take with their investors. The "cost for capital" had better pay off or they can go to zero in a hurry.

We'll find more in the near future. And as I said, I do own shares in EPFL at a significantly higher price than the stock is trading for at the present time. But that's the risk we take when we get involved with private placements.

This thread, as well as the Real Stocks thread, will remain for educational purposes. Any questions or comments please feel free to post.

Peace,

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