ERHC Energy Inc (ERHE)

[nordicroots]

I like your enthusiasm Doc - but in this case, suggesting "the insurance ALWAYS works" may be incorrect. When prices are driven down into the vast reaches of nothingness, what's to stop a majority shareholder from making a tender offer for the whole company at such a distressed price and making the BOD accept his lowball offer. In theory that is certainly a possibility in my mind and the little retail investors without sufficient clout (voting shares) would be stuck with whatever terms they dictate should there be a move to take the whole thing private. Under such circumstances wouldn't all of those who increased their shareholdings to average down find themselves selling at or near a loss? Yeah, I know - it depends on the terms that would be set for such a sale. But, I only recount this scenario as one possible outcome as it is not too far off from that situation I described earlier with Duluth Metals; investors kept buying on the way down to dollar cost average their respective positions and in the end while the stock sold for a small premium over the substantially depressed share price (it too was doing that familiar circling swirl in the toilet bowel at that time), it (the eventual sale price) was still considerably lower than market cap was earlier, leaving many investors very upset. So no - the dilution insurance does not always work out as intended.