Do you want the real truth or just message board pumpers hype? Yesterdays news was NOT good. It just means that this company struck a deal that will allow for them to dilute $7.75M dollars worth of stock into the market for the next 2 years. People who understand how equity financing works probably dumped yesterday. Did you see how many toxic MM's were smothering the ask?? BMAK ASCM BKRT CANT.. More than one fund is dumping right now. I can assure you that.
Now, onto yesterdays news/8k
Although the discount on this isnt all that bad at 20% with an additional 5% added if they're not DWAC eligible its only 25% which is about 1/2 of what you normally see, but this also means they will be adding BILLIONS to the O/S over the course of this time...
Bad news is they WILL raise the A/S and that is 100000000% fact.. That will be demoralizing to shareholders. If people understood how this financing works they'd realize todays news was the kiss of death which is why it didnt run 100%.
I'll just drop a little knowledge on you peeps who dont know what Equity aka Toxic aka Death spiral financing is.
$7.75M in financing..
Quote: (the “Put Amount”) shall be equal to twice the average of the daily trading volume of the Company’s common stock during the ten (10) trading days preceding the Put Date,
This means if the stock trades $100K a day they can finance $200k per tranch.. expect them to do a tranch a week for $200K at a 20% discount and even if its only $100K a week cut my numbers in half.. At current prices of .004 thats 50M shares with 10M more because of the discount. THis means UP to 60M shares can be added to the O/S PER WEEK... In a month that 240M... It is 10000000% inevitable that the A/S will be raised..
So of that $7,750,000 the company received only $800K of the $7.75M leaving about $6,950,000 left to be diluted into the marketplace.. By that time with all the shares diluted and the O/S will be way higher and demand will diminish. This is what we call simple supply and demand.. As supply increases Demand decreases. As the price continues to drop they get MORE shares for LESS money which INCREASES the O/S at a quicker rate..
The lower the stock goes the quick shares get diluted into the market which means they'll probably increase the A/S to 2B then to 5B then to 10B or so unless they just bump it to 10BB right off the bat. I wanted to be out before that announcement hit.
I wish everyone luck on the stock and YES you can still make TONS of money on it with the right players involved, but im a simple statistics / chart guy.. If the numbers arent right i tend to stay away. Chart is still nice though so i might trade in and out of it now, but thats it.
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