Replies to post #49588 on PHI Group Inc (PHIL)

[facts_matter14]

Think of it as a supply/demand issue. The fewer shares available, with a high demand, means a higher price people can get for the shares they are selling, because there are more shares wanting to be bought then are being sold.

When there is an unending supply of shares hitting the market, even if demand is strong, but doesn't outpace the number of shares available, it's a win to keep pps flat, but it increases the likelihood of a drop in price since there is too much supply.

Also, in theory, the value of the company is divided by the number of outstanding shares, so the more shares outstanding does not raise the value of the company, it just dilutes the value over more shares.

This is why the buy back and retirement of the shares is so critical to advancing the pps. Less shares boosts price per share, and high demand on less shares means higher prices paid.

I'm sure many will correct me if I'm wrong, but for now, that's my story and I'm sticking to it.

[KYCats]

Every new share converted and put into circulation reduces the value of the shares you hold since the value of the company is divided into more shares. In reality, although the value of your shares is decreased, investors perceptions may still move the stock up if they believe the future prospects of the company outweighs the number of increased shares. As a rule of thumb though, more outstanding shares is always worse than fewer outstanding shares. Just think where the PPS would be if those buying the new shares were buying already issued shares. GLTU!