Solarbrook Water and Power Corp. (fka SLRW)

[jcrom56]

It was a hypothetical example. But that is how a private placement works. They won't pay the market price for dilutive shares. These are newly minted shares that are being dumped into the public market for the first time. They don't care what the current "share price" is as long as it is much, much higher than the price they negotiate to pay for their shares. With a pink sheet, if you see the A/S and the O/S rising steadily over time as share price conversely falls steadily, you most likely are witnessing a private placement in action.


To precisely answer your question, they would not pay market prices for the stock because it would have to go up for them to make anything. Adding dilutive shares doesn't make the stock go up, it makes it go down. Only revenues and a steady share structure will make the stock go up. Also, a company like HYRF makes money on a PP because they simply print the shares and sell them in quantity to the Hedge Fund. It's pure money for pure paper. The Hedge Fund unloads ASAP because they know the company is doing nothing to give value to the stock. All this is perfectly legal and as unregulated as the wild West 150 years ago.