Replies to post #44849 on Zenergy International Inc. (ZENG)

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i own shares here,at a dip,and its worth the high potencial serrounding this company...<>imo

[bly03]

RockSexton,

You asked:

"Speaking of shares.........how do you feel about 5 groups owning 90% of the outstanding stock?"

I know the question was not directed to me, but I thought that I would chime in any way.

To me, this represents a double-edged sword.

Granted, the fact that a small number of individuals owns an overwhelming majority of the shares means that there is a constant threat of a big seller.

On the other hand, Luiten and the other insiders have a tremendous incentive to see the share price go higher. With 66 million shares, every cent in share price is worth $660,000 to Luiten.

When playing penny stocks, I find that betting on insider greed is frequently the correct play. The drop in share price has caused a net worth decrease of around 6 million bucks to Luiten. My bet is that he will try to get the share price back up.

I'll admit that for most penny stocks, the insiders have a large block of shares, so betting on insider greed would seem to suggest that most penny stock prices would increase, which is clearly not the case. But betting on insider greed frequently involves evaluating who profits if the share price goes up vs. who profits if the share price goes down.

As you are probably aware, many penny stock companies have "death spiral" financing involving convertible debentures where the lender gets more shares for a set loan amount as the share price goes down. (Plus they always get their shares at a discount to the current market price.) These lenders are typically based outside of the US, where they have the ability to short even penny stocks. Therefore, these lenders can profit greatly by shorting the stock (thereby lowering its price) just before receiving share payment. Their shorting, plus their receiving of shares at a discount to the current price, almost guarantees that will get shares to cover at a lower price than where they shorted at.

These lenders essentially become insiders, with tremendous influence on the stock price. Since they profit with a declining share price, I would be much more worried if Zenergy had this type of financing than I am with the insiders owning such a large majority of the shares. To date, I see no evidence that Zenergy has this type of financing. If we find out later that they do, I will jump ship at that time. But for now, I will continue to place my bet on the side of insider greed.

And yes, I know you can make the argument that if you get your shares for free, you profit no matter what price you sell them at. But obviously, you profit more if the price is higher.