Your obviously NOT understanding the dilution thats going on here. The company is not diluting per se. The company was paid, long ago, in cash, from the note holders, for the shares that are hitting the streets today. The note holders are the ones selling the shares, given to them buy the company, today. Say a note holder gave CYSG a loan for $100,000 with an option to convert to common at .001. CYSG would have to cough up 100,000,000 shares to the note holder when the option was exercised, more if the PPS was not at the par value of .001 and less if it was greater. So now the notes come due and CYSG issues the shares. In this latest case the PPS was not at par value. So what did CYSG do? They had already reserved roughly 900 million to pay the current notes due, but the PPS was lower than the par value when the notes came due. So CYSG released news bringing the PPS to .007 which was greater then the par value thus they only had to issue what they had reserved already, per the 2006 or 2007 financials. Now all CYSG has to do is remain QUIET while the converted shares are sold by the note holder and watch as the PPS drops. Yes short term sucks for us but long term great for us. They get financed WITHOUT having to R/S and then dump again or they get financed without toxic programs. When the PPS gets low enough below par value CYSG can then buy back the debt it already recieved cash for at a greatly reduced discount. Now in prior years this is exactly what CYSG has done. The difference now is the transparency involved. In prior years this was all transparent as CYSG filed. Now it is not transparent because they don't and that is what is causing the market to react the way it is on CYSG. If you look you will see they have structured their debt like this for the last 10 years. You should also take note, as seeclear has pointed out numerous times, when Cape issues these convertable notes they also issue warrants to repurchase them. This company has done business like this for the last 10 years or so. They have done this without EVER having to R/S. IMO it's not a matter of 'if' but of 'when' Cape decides to start filing again. The minute those filings come out, good or bad, Cape will explode to levels not seen in years because they will have done what the market wants. Investors are waiting on the financials and I'm not talking IHUB penny investors.
AI
