Replies to post #59219 on In Ovations Holdings Inc. (INOH)

[Flynny]

Thanks for posting this. The premise of the article is that "dilution" is not always bad for the company and, in fact, can be a good thing.

Here are some passages taken directly from the article which, in my opinion, apply to what is occurring right now with INOH and its new MJ business venture:

"Penny stock investors will often hear the term dilution and assume the worst. Dilution is often viewed as a negative thing for an investment, but like most things in the stock market, it is a little more complex."

"Any newly issued shares are sold to investors, and the company uses the money for working capital, or to pay debts, or make an acquisition." and the reasons may include "Paying executives and key employees: Companies regularly pay their key employees, or lure top talent, via shares or stock options. Penny stock companies are particularly fond of this maneuver because they may not have much cash to compensate executives but are able to offer shares that have potential to increase in value."

"Issuing new shares can help a publicly traded company by giving it the greatest flexibility to take advantage of opportunities as it implements its business plan. The benefits can be great, as long as the company is cautious of the potential for causing shareholder dilution."

There are obvious detrimental effects of dilution as well. Form your own opinion. But do not automatically conclude that the issuance of new shares is always horrible. This is especially true when a company with an already maxed-out AS (like INOH) is entering a new business venture and bringing on new members of management to run a brand-new division/venture as has been the subject of at least the past 3 press releases.

GO INOH!