Grey Market or Grey Sheet Q & A

[Renee]

Market capitalization is the subjective value investors place on the price per share (PPS) multiplied by the number of outstanding shares. So, as an example, a $1.00 PPS multiplied by 100 million shares gives a market cap of $100 million. As the PPS fluctuates so too does the market cap and the current owner of shares benefits or loses depending on the value of shares.

Market Cap is different than asset capitalization of the company which is based on asset values minus liabilities.

After an SEC Suspension the market cap drops significantly and each shareholder's money value for their shares decreases.

With the example of $1.00 a share before an SEC Suspension the seller at $1.00 keeps the locked in $1.00 per share. The buyer of the $1.00 per share then loses value after an SEC Suspension. So, the new value of EXAMPLE 10 cents means the 90 cents loss was vaporized. No-one gets the 90 cents as it is simply a loss of value and the new market capitalization is $10 million. The $90 million loss of market cap simply vaporized.

Much like buying a new car for $30,000 and after driving the car off the lot the car is instantly worth less because it is now a used car; or buying a house and the house price drops after purchase for whatever reasons. The losses are borne by the owner of the now used car or the house. No other person or entity benefits from the loss on the car or the house....the values are simply less to the current owner.