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Re: Poptech post# 280377

Thursday, 12/06/2012 3:02:08 PM

Thursday, December 06, 2012 3:02:08 PM

Post# of 326396
Such a simple, elegant and clever solution, I would have thought you are already aware of it. YA distributes about $500,000 of debentures to 8 different investors and each of those investors converts that debt to 125 million shares of common stock, so none of the investors exceeds the 10% beneficial ownership limit and can sell under rule 144.

Only problem is that this adds up to 1 billion shares of dilutive overhang and the 8 YA investors are competing with each other for buyers. They know the price will go down when there is that many sellers and relatively few buyers so they probably short the stock just to make sure it all works out for the best return.

As I said so many times before, its a rigged game. Yes, I like your term "death spiral stealth shares", but now that you know about them you don't really need the word stealth to describe them.