'gattes12',
I'm familiar with the old saw, "dilution caused the pps to go down", and that's a truism.
What I have seen time and time again on penny stock boards is a stock will be motoring along at .20, marauding traders smell blood, and descend like vultures.
They're there on a rumor, start buying, driving the price up a tad, get their non-greedy--it's taught in every trader's manual--profit, and dump causing a retracement.
They, then, begin to bash the stock, driving the price down further. It is a methodical, calculated, movement. The price gets to what they think is a good reentry, buy, spike, dump. Bash again, and repeat the process, until they have driven the price down to where the purchase of a million shares, or several million, is cheap enough to afford them a nice trading bundle of shares. They profit at a tick, what they profited initially selling the first shares they bought at .20 and selling at, say 23.
Unfortunately for the developer at this point, where he could raise a million dollars selling only five million shares at .20, he now has to raise the authorized shares because to raise the million dollars now, he must sell fifty million shares, and there's not that many authorized.
Here is where dilution begins.
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