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janice shell

09/09/11 8:10 PM

#15071 RE: sm caps #15070

Much of the time, the stock price is low because the company has been diluting all along, because it's desperate for money. And the lower it goes, the more aggressively they need to dilute to raise the same amount of money for themselves.
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Renee

09/09/11 8:48 PM

#15074 RE: sm caps #15070

Pink Sheet companies that dilute will often use Accredited Investors and / or Pipe Funders ( ie cash for shares ) after filing a Form D. The terms always favor the lender who receive discounted shares with price protections infused into the agreements. The Accredited Investors or Pipe Funders will flood the market with shares to get their cash and heavily weighted profit ASAP and without regard to a lower PPS. These types of lending agreements are referred as TOXIC because no matter how low a stock's PPS goes the lenders are fully and unconditionally protected.

Another insidious form of dilution is through a company's stock promotion where the promoters receive vast amounts of shares ( or cash the company obtained from Accredited Investors or PIPE Funders ) for stock promotion and they will pump the bajeebers out of a stock to run up the PPS for unconscionable profits. As the PPS rises the promoters flood the market as well as the Accredited Investors / Pipe Funders.

The principles of SUPPLY and DEMAND vary during the phases of brutal dilution. During the promotion the demand equals the supply because gullible investors think they can retire at age 40, filthy stinking rich. As the demand wanes because everyone has spent their wad of money the never-ending supply of shares continues from the amoral promoters and the toxic funders, and those who thought they could take early retirement soon realize that they will now have to work until they're 80 years old...because they were SCAMMED.

Sumtin like that.