Fuse Science Inc (DROP)

[prokopton]

Let me ask you something. Would you rather have 1% of a billion or 100% of a million?

As an investor, dilution of common shares is beneficial because it keeps the company out of debt. Fuse is essentially debt free.

Second, dilution can either increase or decrease shareholder value depending on how effectively management uses the money. If they use it to pay themselves extravagant salaries and bonuses, which many pinkies do, then dilution is definitely detrimental to shareholders. On the other hand, if the money was wisely used to create, manufacture products/services and other activities that grow the company, then the eventual stock price increase will more than offset the increase in the number of shares.

It all depends on how management uses the money.

A trader's view of dilution may be: More shares, pps goes down.

An investor's view of dilution: Use the money to build the business, pps will eventually reflect the fundamentals of the company.

Applied to Fuse, a trader's line of thinking may be:

--what's the next support level? How's the volume?
--will we be trading above or below the 200 MA the next few weeks?
--Golden Cross or Death Cross, etc..

An investor's:

--how are the clinical trials coming along?
--why isn't Tiger promoting the Drops more?
--are they working on placing the products at point of sales?
--have their margins improved, sales increased, etc...

It's good to have both perspectives. A company is only as good as the people running it. Dilution can be a friend or foe, depending on how effectively management uses the money.

Would you rather have 1% of a billion or 100% of a million?