Dilution is looked at as a negative, but not in al
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Posted On: 03/20/2017 12:25:43 PM
Dilution is looked at as a negative, but not in all cases.
When a company increases authorized shares for the purpose of acquisition its a huge positive. They are paying for the acquired company with stock and that company if they are to realize profit from those shares they must perform. The company that pays the shares get value received and the potential future value. What you have to watch out for is a company that converts additional shares to cash for their own use and that is what screws the share holders. What RMHB is doing is setting up to be huge and laying the ground work for growth. If this were a bad situation Mrs. Li would never allow it. They have too much at steak to take that kind of risk.
When a company increases authorized shares for the purpose of acquisition its a huge positive. They are paying for the acquired company with stock and that company if they are to realize profit from those shares they must perform. The company that pays the shares get value received and the potential future value. What you have to watch out for is a company that converts additional shares to cash for their own use and that is what screws the share holders. What RMHB is doing is setting up to be huge and laying the ground work for growth. If this were a bad situation Mrs. Li would never allow it. They have too much at steak to take that kind of risk.
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