here are my thoughts on dilution Dilution Is it
Post# of 5949
Posted On: 08/22/2014 11:30:12 PM
Re: BURN.NOTICE88 #4216
here are my thoughts on dilution
Dilution Is it good, or bad ? Dilution is when the company moves shares from the AS (authorized shares) to the OS (outstanding shares) or tradeable inventory, for cash investments in the company.
This means there are more shares at the same market price and reduces the size of the EPS.
It doesn't reduce the price or value of the stock.
But many pennylanders think it does.
Dilution doesn't change price, it changes EPS. Creating loss in company value, not stock value.
Hardly 1 in a 1000 OTC companies have an EPS to effect.
So, dilution can't effect their company value in the first place.
Whats the value of no earnings, thus no EPS.
But, the value of more cash to a startup is huge!
Cash gives them the ability to attempt to grow.
Without the cash it can't.
So logic says, the retail herd should be happy about dilution.
After all, they want the comapny to grow don't they.
On the OTC, "dilution" is the best news one can hear !
Not only does it give the company a chance at growth, it doesn't effect their EPS value one bit.
They have no EPS to effect.
Plus, every time VCs get there hands on large amounts of shares,
they buy a run, and we can trade for profits !
So, "dilution" is a win for the company, a win for the Venture capital firm,
and a win for the educated pennyland trader, on the OTC.
Dilution Is it good, or bad ? Dilution is when the company moves shares from the AS (authorized shares) to the OS (outstanding shares) or tradeable inventory, for cash investments in the company.
This means there are more shares at the same market price and reduces the size of the EPS.
It doesn't reduce the price or value of the stock.
But many pennylanders think it does.
Dilution doesn't change price, it changes EPS. Creating loss in company value, not stock value.
Hardly 1 in a 1000 OTC companies have an EPS to effect.
So, dilution can't effect their company value in the first place.
Whats the value of no earnings, thus no EPS.
But, the value of more cash to a startup is huge!
Cash gives them the ability to attempt to grow.
Without the cash it can't.
So logic says, the retail herd should be happy about dilution.
After all, they want the comapny to grow don't they.
On the OTC, "dilution" is the best news one can hear !
Not only does it give the company a chance at growth, it doesn't effect their EPS value one bit.
They have no EPS to effect.
Plus, every time VCs get there hands on large amounts of shares,
they buy a run, and we can trade for profits !
So, "dilution" is a win for the company, a win for the Venture capital firm,
and a win for the educated pennyland trader, on the OTC.
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