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Microcap & Penny Stocks : Diamond Entertainment Corp (Previously DMEC)
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To: Ga Bard who wrote (6925)2/5/2000 9:09:00 PM
From: Wes  Read Replies (1) of 6957
 
Sense? Presently there are about 60M shares outstanding. If all the shares under the "plan" are issued there will be 600M. It doesn't take much math to see the result--existing shares will be reduced in value by a factor of 10 to 1, or 90%. Another way of saying it: instead of 12 cents a share value it will be 1.2 cents.

Then do a reverse 10-1 split and existing shareholders will see whatever value they have still reduced by 90%, even though outstanding shares are again 60M.

The potential for a real dirty trick on present shareholders will be in place once this "plan" is approved; of course in these scenarios the "insiders" often get a lions cut of the newly issued shares before the reverse split so they are not hurt. Just poor old "Jonn or Jane Q. Public" gets the shaft.

I suppose some new "investors" are considering taking over the company and want to "dispose" of the existing shareholders; they figure if these "dopes" receive 10 cents on every dollar they have in the company they should consider themselves lucky. After all, isn't it better to have 10% of something rather than 100% of nothing? That's usually how the argument goes. And if we new "investors" are putting up money to get this turkey going you "dopes" are fortunate to have anything left. Get lost.

I don't know if the above is exactly how it will play out, but it's a likely result. I'm glad I'm out.

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