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splavik

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splavik

Re: PENNIEStoSTACKS post# 13458

Wednesday, 07/07/2010 6:26:39 PM

Wednesday, July 07, 2010 6:26:39 PM

Post# of 24287
YES... this is exactly what happens, when a company dilutes, they do not go and sell small blocks, they go through MM's to liquidate and keep the price from deflating TOO much - with that said they both know they price will go down (they're no dummies)

MM's will then short the stock knowing if you issue 100% more shares the price will drop at least 50% from current levels. (its a win win for the company/mm's)

this is why stocks usually slide down more than 50% off its peak during dilution.

believe it or not.
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