Monday, November 08, 2010 6:33:41 PM
This topic has been discussed many times here and elsewhere, and the views differ depending on what side of the fence you're on.
Example: If I sold 100,000 dollars worth of stock at .005 when the share price was at .01 for capital funding/growth, that would seem to be a bad decision which devalued the remaining share outstanding due to the increase in outstanding shares. This proves your point.
What if the company used these funds for a successful growth initiative venture that increased the company's revenues by 1 million dollars, which in-turn increased the value of the company to .02 per/share, or doubled the market cap. Would that make the shares worth less? Of course it would from a dilutive value, but not from a shareholders prospective, since the capital raised increased the over-all value of the company.
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