Friendable Inc (FDBL)

[rut2k9]

The key is understanding the capital structure.

It was obvious for some time, long before the stock cratered, that FDBL's only way of keeping the lights on was to issue toxic debt. They published all these sales. The discount to the market kept growing, meaning the number of shares they needed to issue kept expanding. And as the stock declined, that only grew. To raise the same $200k to keep paying themselves they had to issue more and more and more stock.

Not only was this stock sold as soon as the "investors" could, but the transactions were structured so that they got MORE stock if the price declined. That means they were able to short the stock with no risk. If it went up, they covered with the free stock the company gave them. If it declined, they profited on the short and got extra stock.

Speculators in these stocks love to focus on the "opportunity." But to get to the opportunity you need to survive, and that always ties back to the capital structure.