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gattes12

04/07/07 11:07 AM

#241991 RE: william2112 #241990

william2112 so you are saying that people sitting at the bid brought the price down? When an order is placed to buy a stock (bid or ask)it is an offer, not enforcement. If it were that easy then such would be the case throughout the stock market and no stock would run. It is up to the sellers (MMs for example) to accept the offer at the bid. Most of the time when a stock runs, they won't. The ask price will increase based on demand and volatility of the stock. If a stock is in high demand, the MMs will raise the ask price and not sell at the bid at all because this is what has been established as the price at which people should pay to buy the stock. That should have been the case with the first Dr Phil news. But, because of the amount of outstanding shares (dilution), there really is no demand. If you look at other stocks in the OTC world (Raven Moon Entertainment RVME.OB is a classic example) it is easy to see the long-term effects of dilution as this company has only done it for years. Not saying that GZFX is that bad, but you have to admit, they walk the same streets.

More info on dilution:
http://en.wikipedia.org/wiki/Stock_dilution

Some info on MMs
http://en.wikipedia.org/wiki/Market_maker
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gattes12

04/07/07 11:15 AM

#241992 RE: william2112 #241990

Something to add:

Dilution is what has kept this company out of debt with the amount of shares sold to the open market. Typically OTC stock will use up that ability and R/S thus starting the process all over again. Usually this R/S is accompanied by news of a 'new direction' or to 'make the stock price more attractive'. Such is the case all around the otc world is one of the main reasons why most can never convert to an official exchange. That and questionable accounting practices. This company knew full well what they were doing when the started to dilute and have comitted in the 10K to do it some more.
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bag8ger

04/08/07 8:36 PM

#242088 RE: william2112 #241990

William2112,

I should have read a little further, but, on second thought, I'm happy to repeat, in not quite the same words.