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Microcap & Penny Stocks : DGIV-A-HOLICS...FAMILY CHIT CHAT ONLY!!
DGIV 0.00Dec 5 4:00 PM EST
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To: Dave Gore who wrote (13987)6/18/1998 3:17:00 AM
From: pebbea  Read Replies (1) of 50264
 
Stock Detective report on paid promoters states in pertinent part:

Companies often pay their promoters in stock rather than cash; for many small companies, it is the only way they are able to pay. Regardless of the form of payment, however, sooner or later the promoter will want to sell the stock to convert it into cash. After all, the magazine publishers, printers, post office and the like want their services to be paid for in cash.

Consider an example where a promoter is paid 200,000 shares of a $1 stock. And let's say this stock has two million shares in its float. This means that 10% of the float likely will be sold at some point in the short term. It doesn't take a genius to see that the stock price is going to take a beating when the sale occurs, and that the individual shareholder will suffer.

This may have occured recently. I learned about this stock from the Ed Taxin radio show and began to do DD. The stock was at .30 and I started an initial position. When I saw Ed Taxin in person May 31, he said he sold all of his position at $4.00. That was before the stock went to $8.00. I don't know if he bought those shares through a broker or was paid with shares of DGIV but it sure makes one go hmmmm. It dosen't really matter to me because I'm long term, but, it might serve to explain at least part of the volitility of any BB stock that is being talked about by paid promotors. I have listened to plenty of these shows that seem like radio programs but are actually infomercials for products or services.

Hope this was informative.
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