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Microcap & Penny Stocks : SEXI: Mostly Fact, A Little Fiction, Not Vicious Attacks
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To: snowpile5 who wrote (5670)10/30/1996 10:36:00 AM
From: Albert Friedman   of 13351
 
<<They are usually issued at about 20-40% of the market value of the stock at the time of issuence. Hence, even if the stock tanks, the foreign investor is pretty much guaranteed a profit in 40 days>>

This is not always the case. Stock must be registered, and many times, depending on the agreement, the stock is registered at a five day moving average of the date that the offshore invester picks as his end date of a five day moving average. A discount may then apply on the five day moving average. The discount can be around 10%, and is usually 15%. Many offshore investors short the stock as they register it. This allows for the registered stock to cover the shorted stock. This "locks in" the discount as a profit. A 15% discount, upon covering the short would result in a 15% profit.

Hope this clears up some of the confusion of S-8.
Anyone a hockey fan? GO HABS!!!
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