Replies to post #330 on DNI Metals Inc. (DMNKF)

[Luke_McCain]

Why Reverse Splits are helpful to junior miners

Credit: http://investorshub.advfn.com/boards/profilea.aspx?user=414863

another reason the reverse split will help as it will make the stock less affordable to penny investors looking for a quick flip.

Example:

I only have $ 1000 to invest/gamble. Before the RS, I can purchase a whopping 100,000 shares at $ 0.01

But, after a 1:10 reverse split, I am limited to buying only 10,000 shares at $ 0.10

Get it? It's less affordable, because 100,000 x 0.01 = 1,000 while 10,000 x 0.10 equals... oh, wait, I don't think I did the math right.

Well, I think the underlying philosophy is that it is less affordable to flip 10,000 shares, than it is 100,000.

Allow me to explain.

See, with 100,000 shares I can flip from $ 0.010 to 0.011 and make an easy $ 100, right?

But, with only 10,000 at $ 0.10, and a quick flip at 0.11, not only is it less affordable to me, but my profit plummets all the way down to... hmm... damn.

Wait, wait, I got it - it's based on percentages!

I only use one-half of my available money, $ 500 - that's 50% - and then the first flip above results in a 10% gain on my trade, while the second is clearly less affordable, because... um... let's come back to this one...

reverse split has many pluses some of which I did not even mention

The reader is encouraged to visit Amazon, which has a plethora of business books that have been written about the benefits of junior mining companies employing reverse splits. Many, many pluses!

They will probably RS later in the year right around the new test mine is operational

Ah, so the winning strategy is that they first build a test mine (within six months, with no permits or legal title, mind you) and then they do the RS! [Insert crowd applauding sound here.]

Reverse split leaves us with an awesome share structure. Thanks for pointing that out.

My pleasure. LOL!

de·lu·sion

noun: an idiosyncratic belief or impression that is firmly maintained despite being contradicted by what is generally accepted as reality or rational argument, typically a symptom of mental disorder.

Where is a State-sanctioned eugenics program, complete with mass sterilization, when you really need one?