Posted On: 06/20/2014 10:49:21 AM
Post# of 43065
Re: PaperProphet #9730
When I reread my post I initially thought about correcting it.
Then I realized that the price would adjust, via the market, to reflect the diluted share position.
If you have 1000 shares worth .10 when there are 100,000,000 shares in the float, they are no longer worth .10 per share when the float doubles. They are worth half of that, but the market needs to decide that. Adding the shares does not automatically adjust the price, but the price will adjust.
IF there is very good news associated with the dilution of the shares, then the upward pressure on the value of the shares can keep the price from fully adjusting to reflect the percentage of dilution.
It will depend on the news and how investors perceive its importance for the long term health of the company.
Then I realized that the price would adjust, via the market, to reflect the diluted share position.
If you have 1000 shares worth .10 when there are 100,000,000 shares in the float, they are no longer worth .10 per share when the float doubles. They are worth half of that, but the market needs to decide that. Adding the shares does not automatically adjust the price, but the price will adjust.
IF there is very good news associated with the dilution of the shares, then the upward pressure on the value of the shares can keep the price from fully adjusting to reflect the percentage of dilution.
It will depend on the news and how investors perceive its importance for the long term health of the company.
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