PGI Energy, Inc. (PGIE)

[sevenOdouble]

Under normal circumstances a dividend is a reward to loyal shareholders and is usually done by companies who have solid profits. For what PGIE concerns, there are several possible scenario's...

One could be that since there are alot of wild accusations about dilution (every day, lol), PGIE has decided to give a substantial part of the recently increased A/S to their shareholders, so PGIE can't be accused of diluting & selling shares in the open market.

But this all depends on what type of divi it is and what the conditions are. If they are restricted for a year the possible dilutive effect will only come into play after a year.
And when PGIE manages to increase revenue, profits and enterprise value in the meantime (as recent contracts indicate), than investors won't be eager to sell their (restricted) shares once they become available...

So at first glance it can look like a shady operation and people asking franticly "why" & "whats the purpose"... but if one starts to think about it, and has a long term view, it can actually be very very good for us! Think about it, who would sell their dividend, once the restriction comes off, knowing that your total portfolio will be much more worth in the future...

I for one would hold on to my shares + divi for dear life!!

PGIE has a year to proof itself, and if they do what they claim there will be alot of revenue by then, and they can close new contracts as we go forward, so this dividend (reward) could be a golden nugget guys...

Simplification: you get divi --> PGIE makes profit --> divi could be worth penny's... in a year or beyond...


PS: @doco: you said that the divi would cause the O/S to increase with 100%, but this is not necessarily the case. It all depends if its just the common shareholders (Float) who gets a dividend, then its only a 49% increase... (in a year from now)
Because 51% of the O/S is owned by insiders...

Get the picture?!