That makes no sense. But it does make dollars for the issuing OTC.
You buy high believing it will go higher. Then when it tanks you buy more believing it will go higher then when it drops to trip zeros you buy more believing it will go higher.
That cost average event is part of the pumped plan and you are playing right into it.
I know people who paid $.18 cents for this stock believing when they go to NASDAQ it will go to $3.00 and we know how that turned out.
The set up is to pump low float, high priced shares before the dilution cost average faze two.
They sell 200,000,000 more or less for $.15 and take in $30,000,000 cash on NASDAQ and other HOT news.
When there are no more buyers they increase the authorized to 10 billion, redirect some initial cash to 3rd party debt that is acquired by the company and the debt dilution conversion dump happens flooding a once respectable float of 200 million into now over 5 billion with more being added each day.
NO one but the company is selling shares.
If people believed so much that at $.10 it would rise to $3.00 why would they cost average? It's not to make even more when it hits $3.00 because investors now know that will never happen even though they sold themselves at $.10 it would. You see the syndrome?
People cost average as a way to convince themselves they are not into the stock for $.10 and that it's just an investment strategy.
When they bragged to people about the stock at $.10, they can now say "ME NOO WAY I never paid $.10 I'm only into the stock for $.003" but to do that you have to spend more money, regardless of what you spend your now know $3.00 is off the table but maybe if it goes back to $.10 you make a killing on the stock.
Just like the holders of 10,000,000,000 shares will think they can as well.
If the price is now $.002 and you cost down to $.0017 you may see green and brag now that your in the profit arena, it's only profits if you sell it at a profit and after fees and taxes any gains even at $.0017 will be lost.
SO now you are waiting for the stock to drop to $.0001 so you can load up again and like knowing $3.00 is off the table, so to will $.10 when you cost down to $.0005 and say if it goes back to $.0017 you make a killing.
The dilution is used for 2 reasons, to keep people buying more as the price declines (Is the reason for the huge increase to 10 billion) knowing people will keep cost averaging and attract new investors who would not touch the stock at $.10 or even $.01
Then other reason for dilution is to prevent anyone from selling so only the diluted shares can be dumped by the company and debt investors.
SO to recap, they sell $30,000,000 initially then 10,000,000,000 on the debt dump dilution at even $.002 is another $20,000,000
That’s $50,000,000 possibly more and still they have no revenue or products under the tickers branding (always a sub company)
SO you are now saying your OK at $.0017 but what was the cost to get to that point. Did you buy $5000 at $.10 then more at $.01 then more are $.0008 to get to a cost average of $.0017 you either.
A) You own very few initials at $.10 and just spent a few hundred more to cost to $.0017 or
B) You invested heavily at $.10 and had to spend 1000's more to get your cost average down that low.
Either way you spent more then you will ever get back. If you did not cost average you know its a total loss and you will also see at $0017 no MMs will buy the large lot of shares. Then you will buy more at $.0001 for another few grand with the belief at $.0017 you will make a profit.
By then their maybe 20 billion in the float that no one will be able to sell as the MM’s lower the bid below profitability.
After the dilution the news stops the buyers dry up and with no buyers, the market makers will not buy on the bid what they cannot resell.
Investing this way means everyone makes money except the retail investors.
