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Microcap & Penny Stocks : Amazon Natural (AZNT)
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To: Arcane Lore who wrote (9215)10/24/1998 8:56:00 PM
From: Arcane Lore  Read Replies (1) of 26163
 
Rethinking Regulation S

by Louis Corrigan (RgeSeymour)

Imagine if a public company were allowed to issue shares on the sly, without telling its shareholders what it was up to. And let's say the firm issued millions of shares, offering them in a private placement at a 15% to 40% discount to the going market price, compensating one class of investors for potential risks even as others paid full price on the public market.

Now imagine what would happen if the folks who bought into the private placement could turn around and sell their shares on the open market before the rest of a company's shareholders even knew their stake had been diluted. The huge new supply of shares would hit the market, the stock's price would drop, and the average investor would be left virtually clueless about what had happened until is was way too late to act. ...

The quote is from a March, 1997 Motley Fool article and summarizes the situation prior to the SEC introducing (in Oct., 1996) the requirement that reporting companies issue an 8-K for Reg S sales:

fool.com

Also note that some folks can get better than a 15% to 40% discount provided they choose the right company (assuming Sylver's account of the terms of the Reg S sale is correct).
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