Thursday, May 04, 2017 2:37:56 PM
Authorized Shares,
has no bearing on the price.
The "Shares Authorized",
is not used in any fundamental of financial calculation,
to determine company value.
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Dilution:
When the company moves shares
from the A/S (authorized shares)
to the O/S (outstanding shares) or tradeable inventory,
for cash investments in the company.
This means there are more shares
at the same market price
and reduces the size of the EPS.
It doesn't reduce the price or value of the stock.
But many pennylanders think it does.
Dilution
doesn't change price, it changes EPS.
Creating loss in company value, not stock value.
Hardly 1-in-1000 OTC companies have an EPS to effect.
So, dilution can't effect their company value in the first place.
What's the value of no earnings, thus no EPS.
On the OTC, "dilution" is the best news one can hear !
Not only does it give the company a chance at growth,
it doesn't effect their EPS value one bit.
They have no EPS to effect.
Plus, every time VCs get there hands
on large amounts of shares,
they buy a run,
and we can trade for profits !
So, "dilution" is a win for the company,
a win for the Venture capital firm,
and a win for the educated pennyland trader,
on the OTC.
Stocks of many start-up companies,
bottom at the "Sub-penny" and "Triple 000" price levels,
before they begin their meteoric rise.
"Venture Capitalists"
like to buy the shares of these companies at these low levels.
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