ECU Silver Mining Inc Message Board

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Gold/Mining/Energy : ECU Silver Mining Inc

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To: jgibbs who wrote (109)	2/19/1999 1:11:00 AM
From: baystock	Read Replies (1) of 672

One tactic used by small companies to do a secondary financing is to engage a promoter to create demand for the publicly traded shares. The insiders sell their own shares to meet the demand and then use the proceeds to subscribe to the new private placement shares. The company wins because it raises money for its business needs. The insiders win because the private placement shares are usually sold for a 20% discount to the market price. The promoter wins because he gets paid in free shares for his services...and it looks like he earned his keep on this one, with the successful ramp from 20 cents to 50 cents. Whether the shareholders win or not depends on if the money is used wisely to add more value to the company then the is subtracted by the share dilution. I don't really know for sure what happened in this case but I wouldn't in the least be suprised if events transpired as above.

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