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Unfortunately, while a company might have the best possible intentions when it comes to diluting their stock, a lot of investors see it as a major red flag and will never invest in that stock again.
DGRI says they are raising capital for their plans in 2011, which is entirely reasonable. However, if they dilute at these levels, what will keep them from diluting when this stock eclipses a dime or a quarter? They could easily release another PR at that point saying they have greater ambitions and need to raise more capital again.
IMO, they are walking on thin ice with their shareholders right now.
Volume and time are unclear according to the PR. Any exactions on a timeframe are inferences and speculation. No one knows for sure how many shares are being dumped, when they started dumping and when they will stop.
Longs can take from the PR that big things are on the horizon, and the dilution is to raise capital for their plans in 2011.
Flippers and daytraders might want to find a different play for today/the near future. However, I recommend keeping DGRI on a watch list through Jan 2011, as the stock has shown plenty of 25%+ days in the last few months and there is no reason not to believe those gains will not be repeated in the future.
All IMO, take it FWIW.
The info came from the PR the other day:
"Shareholders have expressed interest regarding the number of shares that are outstanding in the Company. As of December 1, 2010, there were 298,306,737 shares outstanding. In the two months following our last report on September 30, 2010, the Company issued shares for consultants and managers, and the liquidation over eight hundred thousand dollars ($800,000) of debt. During that same period, the number of shares available in the "float" grew to approximately 150M shares as legacy shareholders and others recognized the significant increase in liquidity during the month of November, many of whom had held restricted stock for over three years. At the time of authorship of this communications, there is a possibility for additional debt conversion although amounts available for conversion are greatly diminished, likely reducing dilution in the near term."
No one should be arguing that diluiton isn't happening or won't continue happening. The company laid it out themselves in their words (above) that dilution will most likely be occurring in the short term. They worded it in a way to make it seem like it would be a small amount and wouldn't last long, and their reasoning for doing so is to avoid future dilution. However, they didn't specify an amount or time period, so it is all relative.
Long story short, the company themselves said that dilution has and will continue to occur, and they did not give any specification as to how much or how long.
Great post! I was banished from TRDY board for over a week because I was defending against a basher.
The best thing we can do is ignore them. Name calling or "YELLING" is counter-productive and usually will end up with both parties being disciplined.
I can now post here 5 times a day (thanks Shelly! ), but I have learned a valuable lesson and hope others learn from my mistakes as well.
GO TRDY!
8-K will be posted here when filed:
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000815098&owner=exclude&count=40
So keep your eyes on that page peeps!
4 market days aren't over yet, so I would hold back on the allegations for now.
No 8k yet, will appear here when filed:
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000815098&owner=exclude&count=40
A little more volume today and we could have a breakout here!
OK, that is what I am hoping as well!
Do you speculate the cause to be quickly impending 8k/RM news, or the opposite, that this is going to be drawn out longer than most of us hope? What is your opinion?
Haha, I understand! Appreciate the reply, GLTY!
Bags here are light in comparison to other plays. I am holding in the red looking for a green exit in the coming months.
How are they related? Sorry, I don't have time to read through those links, are they previous ventures of Dan Hollis?
That is implied.
From yesterday's PR:
As of December 1, 2010, there were 298,306,737 shares outstanding.
Not sure where you got your numbers from.
Additionally, it's the general consensus that other things mentioned in the PR yesterday have been occuring today which affect your numbers. Namely, the sales of restricted shares by a third party who owned said shares for 3 years now and is taking advantage of current liquidity to sell for a loss.
Read some posts before you make posts of your own.
Transparency is the biggest thing DGRI has running for them at this moment.
The only way for a company to move forward after sales of restricted shares, either by outside funds or the company itself, is to be candid about it. True longs will appreciate this, and not only hold tight but accumulate in the new lows.
If they said there will be no dilution and then we see dilution, RUN. Fortunately, that is not the case whatsoever, and longs can rest (somewhat) easy.
IMO, it is a little of both. The 3yr old restricted shareholders using the liquidity to dump for a loss before year end are obviously the cause of the drop in PPS and large selling volume.
However, I do believe the company is liquidating a smaller amount of shares, using the aforementioned dump as an opportunity to raise some capital by the sales of restricted shares without raising too many alarms. In fact, I would be surprised if they didn't take advantage of that opportunity.
All in all, I don't believe this is a major cause of alarm if you plan on holding long here (at least 6 months or more). There seem to be great intentions behind the dilution, and if they can raise enough capital without alarming investors, this could work in their favor. Regardless, dilution is unfortunately a red flag for a lot of investors, and these actions could prevent DGRI from getting where they desire to go in the short and long run. It's a risky game they are playing.
IMO, it is in their best interest to get the deal finished sooner rather than later.
Not saying this is definitely going to happen before New Year's, but there is still a great chance of the deal going through in early January.
blame the people who are speculating..support broken..next 0.02
Um, excuse me, but you are speculating, calling out future PPS. So are you telling us to blame you? I'm confused.
MM signals, (if you believe in that kind of thing), or maybe just other traders pulling the strings of those who do believe in the signals.
Either way, meaningless. Never seen "signals" set off any significant change in a trend. Any time they've popped up before a run or dive is purely coincidental, all IMO.
Actually, they said they are going to continue diluting in the short term:
"At the time of authorship of this communications, there is a possibility for additional debt conversion although amounts available for conversion are greatly diminished, likely reducing dilution in the near term."
They tried to make it vague, and leave in the possibility that they won't dilute, but that is just that, only a possibility.
Also, the word "likely" scares me. There really is no telling how long dilution will continue, or how much volume will be diluted.
If you like the fact that the company is transparent about their dilution, hold long, average down.
If you want to avoid dilution at all costs, minimize your losses, find a new stock.
My .02
Additionally, although it may take a long time for this RM to be complete, it is my opinion that it will happen sooner than that.
If the longs here are truly long, we shouldn't have much to worry about. Hopefully we have some longs who are dedicated to seeing this stock through, and will buy up the shares tossed by those who become imaptient.
"Much" is a relative term.
To management, 30mil shares might not be "much."
To shareholders in at .03, that seems like "much too much."
Very true, didn't really get around to reading the PR until about an hour ago though.
I agree. This is clearly the reason why the PR did not come out during market hours yesterday. Man, do I wish I sold yesterday when I was green. I would've been happy to take my original position and double it at a better position when this dilution is finished. Live and learn.
This is not "MM Manipulation," it is sales of preferred stock by either the company, or a sizeable shareholder dumping for a loss before year end, or both. Along with the PR which clearly states this is the case (refer to my last post), the volume here tells the story.
Anyone with shares here would be silly to unload now because of this.
If anything, the filing further solidifies the company's intention to RM with someone.
It seems like it is going to take longer than some folks hoped, but it is clear that this event will eventually take place.
I am in the same boat, got my funds tied up in this one as I wait, which is frustrating as those funds could be used in other plays, but I could also lose those funds in other plays just as easily.
Owning LOCN shares is a no-brainer to me. Although it ties up funds for the time being, there will certainly be a payoff at some point for being a shareholder.
My .02
Actually, we do know, as it is clearly spelled out in the PR:
Shareholders have expressed interest regarding the number of shares that are outstanding in the Company. As of December 1, 2010, there were 298,306,737 shares outstanding. In the two months following our last report on September 30, 2010, the Company issued shares for consultants and managers, and the liquidation over eight hundred thousand dollars ($800,000) of debt. During that same period, the number of shares available in the "float" grew to approximately 150M shares as legacy shareholders and others recognized the significant increase in liquidity during the month of November, many of whom had held restricted stock for over three years. At the time of authorship of this communications, there is a possibility for additional debt conversion although amounts available for conversion are greatly diminished, likely reducing dilution in the near term.
Glad we are on the same page, not trying to take anything away from your previous posts, I tend to agree with you most of the time and I appreciate the DD you have done on this company. It is really important not to feed into the frustration ocurring during days like these, and I thought that was what happened a bit there.
I am still holding DGRI, for what it is worth.
You never told us who it is, you never named a company, you just relayed "what you heard."
Sorry but I am not a lemming trading stocks based on an anonymous poster's information.
IMO, you also should know better than to believe others would just blindly follow your words.
Really? What you speculated was your opinion on what is happening. He has his. You didn't name a company or bring any facts, just speculation ("from what I hear").
IMO, both your speculation and his are equally viable, and his happens to be more believable.
When you slam someone with a different point of view it makes your position weaker. Instead of accusing him of "not having viable grounds to make such a statement," maybe you should say something like, "that is possible but I believe it is unlikely for the following reasons."
Just my .02
I agree, and I am becoming more and more skeptical about this stock by the minute.
We just had news, and it was rather positive, yet no blast off. In fact, we are in the red.
I don't know why, everything seems to point to the fact that we are indeed undervalued, yet the PPS can't hold any gains.
Anybody have any reasons, besides MM manipulation, why this may be the case? Not bashing, just asking questions.
$1.46 up!
Who would've guessed the History of Howard Stern Act 4 would be the catalyst? :-P
I don't know anybody who shorts penny stocks retail.
That does not mean that the market makers do not have the ability to short a stock. I am more than confident that they have that ability.
At first glance, this filing doesn't appear to tell us anything we don't already know.
No, we are waiting for an 8-K which is a filing announcing the event of the reverse merger, and revealing the company which LOCN will be merging with.
I am not finding any significant news in this filing, but it is late and my eyelids are heavy. I will look at it more closely in the morning.
Very disappointing close here IMO, lets hope for some really killer news AH!
Otherwise the fire sale begins tomorrow at 9:30.
Great analysis, wish I had some ammo for this play!
I have 250,000 shares.