Circa Pict. & Prod. Co. Intnl Inc. (fka CPPD)

[Spokes]

Reason why R/S causes a stock to plummet in the penny world is because management continues to dump and dump. Investors view an R/S as a simple way for management to "erase" previous dilution and start diluting fresh again.

Mathematically, an R/S doesn't change the value of your holdings at all. The reason why we often see stocks plummet after an R/S is simply because there is suddenly "room" for the stock to plummet. In other words, even though a stock might be trading at .0001, the stock itself might be worth a LOT LESS than .0001. We can't see how much less because our ticker only goes to .0001. However after an R/S, the stock might jump to .01. And then, it will fall back because in essence it was always worth less than .0001 and therefore, worth less than .01. This is especially true if management continues to dump after an R/S.

Therefore, what we are seeing when a stock plummets after an R/S is NOT a result of the R/S. It is simply a result of there being room for the stock to plummet and show us its TRUE underlying value. IMO