PPJ Healthcare Enterprises Inc (PPJE)

[Ed the Trader]

When people read that PPJ will be selling new shares to raise $5 million, the knee-jerk response to the news will be that this is a huge amount of dilution, and the stock price will completely crater. --Ed

You bet. --Janice

Yet, the share price did NOT completely crater today, so the market opted to agree with my assessment from this morning. A well funded PPJ can be better than a poorly funded PPJ. (Do notice that I used the verb "can" as although funding is no guarantee of performance, lack of funding almost always guarantees the lack of performance.)

...and because the funds will be raised using restricted stock which will not sellable for at least one year, the increase in corporate value will come at ZERO DILUTION in share value for a one year period. --Ed

Don't fool yourself. This offering can be sold only to accredited investors. At least part of it may be picked up by a toxic financier. They often participate in these things, and they find ways to sell almost immediately. I don't think, though, that she has an advance arrangement with anyone; if she had, she'd have done a 506(b), because she wouldn't have needed to advertise it. --Janice

Certainly, there is always the possibility that some will skirt the rules. However, that improper dilution will not be officially known, so it will not be reported as part of the official outstanding share count, which is what people use to gauge issues like dilution. Therefore, although it will cause ACTUAL dilution, it will not cause EFFECTIVE dilution. The only real impact of such additional uncounted outstanding shares is that the EFFECTIVE float will be higher than the OFFICIAL float, and that will make share price changes a bit harder.