Brad and all,
First, yes a reverse can force the shorts to cover to a degree. If you are short 10 shares and there is a 10 to 1 reverse, you are still short 10 shares, not 1. Whereas a legit holder just sees his account shares reduced by 9. Not sure if I explained that well, but the answer is essentially yes. When they reduce the legit holders shares it is basically compounded by 2because of the shorts. I am not very mentally lucid right now, so perhaps someone can do a better job of explaining that.
Brad specifically, this company lost .041 cents per share. It has to date, less than 4 million outstanding. Insiders own half of those shares. (1.9 million) So, A 20 to 1 leaves less than 200,000 shares outstanding. Then issuing another 40 million on that does not really add a whole lot, in penny stock terms, to the float. Especially if these people are the least bit honest and actually use the money to improve business. They have cash flow ($700K in bound) and a fairly large inventory (200K, I believe) They are close to actually making money. If they get the $200K settlement, you will see EPS. (I will not hold my breath.)
FINALLY, I bought this for two reasons. They have a chance to make it. If they can put up any EPS in the next year this stock will be worth a lot more than it is now. I tend to believe it has been shorted quite a bit. LASTLY, the ticker is worth .10 to me for sure. If I could buy all 4 million shares for a dime today, I would. Guys, that is less than $400,000 for a shell with the ticker JAVA! Hell, I would pay twice that. I could come up with $100,000. Anyone else interested? E-mail me and maybe we can put something in motion.
PROP's question is a good one. Who authorized all this stuff? See, Herb owns half the damn float and I suspect other insiders own a chunk to -- SO, they can do whatever the hell they want. Think about it.
My guess is that after the reverse and the 40 million new shares, the shorts will cream this stock. If anyone is interested in some action now AND then, e-mail me. |
