Drone Services USA Inc. (DSUS)

[akavir]

Agreed about the dilution. With such little info on the company to work from, let me illustrate what is likely to happen with the companies own words, and with what we've seen over the past week.

November 12, 2013

Let me assure you that the Company has NO intention of diluting shareholders...

...740 Million shares are currently in the trade-able float, available to the general public.

The Company would further like to advise its shareholders that a Reverse Split of the Company’s shares is not being contemplated, planned or proposed anytime within the next
2 years.

January 14, 2014

Effective January 14, 2014, the company has successfully completed the collection and return of 499,998,000 shares of its common stock back to the company treasury for cancellation.

January 27, 2014

Our share structure as of today is as follows:

Authorized: 5,594,000,000
Outstanding: 4,028,505,050
Active: 2,110,679,152

...tradable shares will be 736,992,152...

...we consider a minimum of 40% of the current tradable shares, (294,796,861) to be in shareholders hands being held long and not regularly being traded. This presents a tangible, liquid, trading-float of 479,044,899.

Our intention is to bring the trading float as low as possible (Below 300,000,000).

Now that we've laid out what the company has told us, let's look at what happened this past week in the stock. BILLIONS OF SHARES WERE TRADED! I understand many of them are the same shares being flipped, but it doesn't explain 100's of millions of shares weighting down the ask side all week. What does explain it is:

3/3/2014(First trading day after "gift" shares announced)
Authorized:7,000,000,000

Why would a company that's trying to decrease it's trading float increase it's Authorized shares?

Why if there's only 479M in tradable float, did almost 5 billion shares change hands this week? The well should have dried up and run the stock up Tuesday since everyone would be holding.

All these things lead me to believe one thing. DILUTION AND REVERSE SPLIT! I believe they are serious about bringing the float down below 300M. The only way for a cash strapped company to do that is to reverse split. And in the mean time put all 7b shares into play. We may just get our preferred shares paid out. But at the expense of the common. I think you're going to see not just the float, but the outstanding share drop to around 300M. Let's do some math!
.0005x1000000=$500 (Initial Buy)
.0001x1000000=$100 (Price Before Reverse Split)
1000000/200=5000 (Shares held after 1:200 R/S)
5000/500=$0.1000 (Break even price)
.0001x200=$0.0200 (Probable Maximum Stock Price Post R/S)

If you bought in at the big run of .0005 for 1M shares, the price ran down to .0001, and the stock reverse split 1:200, you would be left with 5000 shares. The stock COULD start out around 2 cents at a maximum. That would be the fair market value post split. The problem is, it's not. It may not even be priced at a penny post split. It may be priced competitively to attract investors, since in general, who wants to get into a company that just screwed it's shareholders? So quite literally, for every million you're holding now, your $100's or $1,000's of dollars of investment could be worth the price of a Happy Meal in a week. It's an aweful lot of ticks between even .0200, and .10 to break even.

If they're giving us a 1:175 "gift" then they're probably going to R/S the common shares slightly more to cover it at 1:200. This should achieve their goal of bringing the float down. The worst part is, they don't have to decrease the authorized shares, and could starting pumping in heavy amounts of stock at any time, further reducing the chances of it getting up and out.

But, I'm not all gloom and doom. Maybe they really do have an ace up their sleeve that's about to take the company to the NASDAQ. Anything is possible in pennyland. All I know is, I pulled money out of a stock that quadrupled in price in the 2 weeks, to buy into PVEC when the "gift" shares were announced here, and this stock has not run the way ANY of us would expect it to behave during a week that should have brought the ask side begging to buy shares by Friday the 14th. Here's to hoping for the best, but in light of so little news from the company with solid revenue streams, this seems the most likely scenario. Good luck Peter, Kerry, Jason, and company!

THESE ARE MY OPINIONS AND SHOULD BE TAKEN WITH A HEAVY GRAIN OF SALT AS INVESTMENT ADVICE!