Replies to post #283 on Grey Market or Grey Sheet Q & A

[elbiatcho1]

Market Cap is simply price per share multiplied by the number of outstanding shares, so yes there is a huge loss in the market cap after a SEC suspension.

Where does the money go to? Goes to whomever sells their shares.
The threat of having stock go to grey market (if it hasn't already after suspension) is worrisome for investors, so they usually sell asap. Trading stock on grey sheets is extremely difficult and illiquid.

Is this how the SEC gets paid?

Are you looking for a conspiracy theory?

[Silver_hawk4]

The price drop is mainly because our the dramatic drop in demand... More people trying to get out of the stock and the skepticism of new investors to buy(because of the move to GreySheets). It's like buying a tractor trailer full of oranges ant then the FDA puts out a warning on oranges... You'd have to sell them at a much lower price to get rid of them... And to directly answer your question, the "Extra" cash are in the pockets of those lucky enough to have exited the position(Sell their shares) before the adverse actions took place...

[bigmoneytrader]

How about this answer. The ask and the Bids are pulled and by magic the price plummets down down down. And someone shorted this turkey! :) That is closer to the truth....

[Renee]

Market capitalization is the subjective value investors place on the price per share (PPS) multiplied by the number of outstanding shares. So, as an example, a $1.00 PPS multiplied by 100 million shares gives a market cap of $100 million. As the PPS fluctuates so too does the market cap and the current owner of shares benefits or loses depending on the value of shares.

Market Cap is different than asset capitalization of the company which is based on asset values minus liabilities.

After an SEC Suspension the market cap drops significantly and each shareholder's money value for their shares decreases.

With the example of $1.00 a share before an SEC Suspension the seller at $1.00 keeps the locked in $1.00 per share. The buyer of the $1.00 per share then loses value after an SEC Suspension. So, the new value of EXAMPLE 10 cents means the 90 cents loss was vaporized. No-one gets the 90 cents as it is simply a loss of value and the new market capitalization is $10 million. The $90 million loss of market cap simply vaporized.

Much like buying a new car for $30,000 and after driving the car off the lot the car is instantly worth less because it is now a used car; or buying a house and the house price drops after purchase for whatever reasons. The losses are borne by the owner of the now used car or the house. No other person or entity benefits from the loss on the car or the house....the values are simply less to the current owner.