Genta, Inc (fka GNTAQ)

[fmrick]

doesnt make much sense that they slammed the stock back to .001 today. I dunno fellas I would buy .001's but what happens if they take that bid out ?

I don't think you have to worry about that. It is not going below 0.0010 (at least not until they adjust the conversion price).

That is the conversion price where the finance people get their shares. All they have to do is call and say send me XXX million shares. The company (the transfer agent actually) sends them shares and credits their account against the debt. They still have a lot to go.

As I pointed out yesterday, what they really do is sell short into the volume. They they look at how many they sold and call the company and say send me that many shares. That way they are never holding any shares. It limits their risk.

This floor at 0.0010 is what make any technical analysis impossible. It is a hard floor. They are not going to sell the shares for less then they cost them. So all these people screaming "It put in a bottom!" are not exactly right. It is a bottom, but not one really, because it is supported by 8 billion shares sitting there.

But as nutriman pointed out, this could get real ugly. The finance deal requires the company to adjust the conversion price down if the stock trades too low. It is way past that point. At some point the finance people are going to get tired of the low volume low profit trading and demand the company lower the conversion price. When that happens the stock will fall slowly to that price. That is what it has done for years, each time they lower it.

My guess is the next conversion price will be below 0.0005 (unless the ban on a reverse split against Genta is lifted).