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Microcap & Penny Stocks : PennyStockPicks
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To: Ed Silverstein who wrote (3)9/4/1998 12:32:00 PM
From: WhipsawMcGraw  Read Replies (1) of 8
 
Let me explain how this works. Let us pretend I am an attorney with bulletin board shells. These shells cost me $250,000 each. You come to me and say you have an idea for a company you want to take public. I can then raise you 1 million dollars for 1 million shares. The company however has 20 million shares available. As the attorney I take 10% of these deals. So, 1 million shares is sold to the public. However the attorney owns 2 million shares and controls twice the float. Keep in mind that the company does not own any assets, just the 1 million dollars. Since this is your idea I will give you 10 million shares because you are the CEO. This stock is restricted for 2 years but the attorney is only restricted for 1 year. Next, the company is non reporting, which means that the company does not have to release earnings for what the company is doing in general. I could be a bio-firm that buys a house in San Diego and a bar in town. This is legal and acceptable.
Now for the news letter. George Schleiben is paid 2-3 thousand shares per month for promoting the stock. Keep in mind, this is nothing because the company has 20 million shares available. So George then sells the stock each month and dilutes the current shareholders. Ask George if he has ever sold 1 share of a company that he is still promoting. He has done it for everyone. Stock promoters are legal con man that make lots of money. I work for an investment advisory firm that is conservative. Day after day we hear about these penny stocks that are going to be huge movers. I have yet to see one. Stay away from these companies.
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