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Microcap & Penny Stocks : Corporate Vision (CVIA)
CVIA 0.4800.0%Jun 30 5:00 PM EST
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To: MG who wrote (2218)3/5/1998 8:07:00 PM
From: Ga Bard  Read Replies (1) of 6654
 
Ok RegS there are basically a lot of different types. Generally they are used to borrow money against. Now the dollar amount of the loan determines the amount of shares for the dilution. Now the lower the stock price the more shares are considered for the dilution to satisfy the Reg value. Example if the loan is $500,000.00 then at .01 the Reg dilution is 50M shares at .02 its dilution reduces to 25M at .03 16.6M at so forth. Now this is not part of the float or issued stock BUT the share dilution factor can be used in certain instances especially in this market.

Now if the Reg is not converted and the company buys it back AND there is a short sell position against it they have to go to the market and buy shares. Now the key here is at .10 the dilution is only 5M. As you can see it is in the best interest of some to keep this stock price down as low as possible. Where most scream bloody murder about this filing I find it very interesting at this level

The more the price rising the less the dilution factor. Now I do not think they have to cover until it is bought back. Now I could be wrong so I would like another opinion from someone more savvier than me. But that is how I understand it.

BTW SEC wants to outlaw this type of transaction I do believe. Me I wish it were outlawed to be honest with you.

Happy Traading

GaBard

GaBard
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