Posted by: Montanore Date: Saturday, March 17, 2007 3:39:52 PM
In reply to: None Post # of 2757
More about dilution:
Dilution:
The selling of newly issued shares. The basis in which the entire stock market revolves around is the issuance of shares to acquire the capital to sustain and allow a company to grow. This is 100% legal, even when done with 'less than good' intentions and done thru mis-representation. The less 'blue chip' a company is, the more likely the dilution will not bear fruit.
Dilution is inevitable in all companies, given it's nature and value to a company. A 'good' company dilutes minimally, and gives shareholders 'value for their money', ie; increasing/improving bottom line fundamentals.
It is HIGHLY advised to locate the Transfer Agent (TA) of any company you wish to be invested in for more than 1 week. By frequently calling the TA, you can gain a neccessary understanding to what extent the company is diluting. TAs can give you the outstanding shares (o/s) for any date you ask. By knowing the o/s on the first of the last 3 months, gives a good idea of dilution rate.
Stay far away from an issue that the TA has been gagged, atleast until you have become VERY experienced in investing/trading. There is virtually NO good reason for a TA to be gagged. None.
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