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Chunky Munky

06/17/10 9:41 PM

#14831 RE: tommyk2 #14827

What I said was this... Lets say a person buys 200m shares of company XYZ for a total of $650,000.

Now that person turns around and starts selling those shares. He has sold say $300,000 worth of those shares. Has he obtained a profit yet?

I say NO. His initial investment is not off the table, therefore no profit. He has recouped some of his original investment though.

The "Profit" is dictated by the shares remaining once the $650,000 is fully repaid.

Now lets say there is a difficulty in the stock and the price drops. Fear, bad or lack of news, dissatisfaction within the shareholders, whatever.

This person is no longer able to sell the shares for the once held premium, so it will take more shares for him to get his original investment back, therefore less shares to sell for "profit" AND a lower PPS to boot.

So IMO, it is in this person's best interest to ensure that the company is stable, profitable, and that the PPS is maintained at a higher level, so he or she can sell these shares and garner a larger profit.