I have a question for you. THIS IS IN NO WAY A RECOMMENDATION ON WHAT ANYONE SHOULD DO!!! I can only say that this is what I DID when I had been in at much higher prices. I do understand the theory behind dollar cost averaging on the way down, but, I feel that only applies to a more established company's stock. They tend to be more expensive stocks that trade in smaller ranges % wise. EKSO reacts much differently than those stocks. My question is, why not sell everything, (not meaning you) let the stock drop for at least the required 30 days to avoid "wash sale" rules (the loss can then be written off at the end of the year) then at some point get back in? I realize that a person would have to hope the PPS does not go back up while he/she was out.
Using your PPS numbers and share amount number I will explain what I did when I was in at much higher PPS. Selling the 4,000 shares at say 2.00 gives you $8,000, a loss of $2,800. (from $2.70/share)(which gets written off at tax time). Then wait 30 day get back in at $1.30 with the same amount of money that you had from the sale ($8,000). A person can now buy 6,153 shares at $1.30.
If that person stays in and averages down at $1.30, his/her paper loss will now be $ 5,600, and will have only 4,000 shares plus he/she will have to add fresh money.
Now we are both at the $ 1.30 level. My way a person would have lost $2,800 (which is written off) but have 2,153 more shares. He/she then adds the same amount of fresh money as in the above. He/she has many more shares working for him/her to recover the $2,800 he/she wrote off because they skipped the loss from the drop from $2 to 1.30 and used the money they saved to buy additional shares....If the stock goes back to the $2.70 price, in one example we break even, with the original amount of shares plus realize a gain from the new money, in the other example there is a gain from the new money, $2,800 loss (written off), but a gain of $3,014.20 plus I have 2,153 shares more working for me from here out. So basically at the same point in time and with the same amount of money invested the second example is up $214.20 (plus the write off) and has 2,153 extra shares working for it, which is huge.
Again, I am NOT recommending to anyone that they do this. There is the risk that the stock moves higher while you are sold out and you cannot get back in. I guess it comes down to how confident you are in the original assumption that the PPS will go down to the target price(the average down price, in this case $1.30).
Your comments and corrections to my examples or math are welcomed.
