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Re: Horatio79 post# 22749

Tuesday, 01/24/2017 2:13:52 AM

Tuesday, January 24, 2017 2:13:52 AM

Post# of 54543
They do escrow for a number of reasons. Say a guy is going to buy the company by buying a bunch of shares. They sometimes put the shares on the side in escrow ( a holding tank on the side )and wait for him to buy them. If he doesn't buy them, the shares are voided out. If he buys them the AS goes up, and so does the OS.

They sometimes put shares in escrow if they think someone is trying to do a leverage buyout and take possession of the company by getting over half the shares. If someone tries getting controlling interest, they pull the shares out and give them to themselves to hold controlling interest. The second they pull any shares out of escrow they become active on the AS, go into the OS, and dilute the shares out there. But normally they don't mess with escrow to block a leverage buyout, and just increase the AS right away and give them more shares. The nice thing about escrow is the shares are not active and they can back track and get rid of it any time.
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