Avalon Technology Grp (fka AVLN)

[Investorman]

The problem with the divi is that Downs talks about "valuation." We have no idea what that "valuation" is based on nor even if the new company will even be viable.

Downs says he is issuing restricted stock to deter daytraders but the only people the restricted stock penalizes is his loyal longs. Daytraders aren't going to care about restricted stock and aren't going to buy IDS to get it. They will only deal in unrestricted shares. The people holding restricted shares for a year or more are stuck while only being able to watch the stock price fluctuate.

There is no viable reason for this divi except to pump up the price of IDS stock. If the assets of the HLS division were so valuable, he would file financials and keep the assets in IDS. This is an often used trick for pink sheet stocks with few valuable assets.