"Why would they have to get rid of all the investors who bought in under a dime if your #2 scenario is correct?" |
The 2006 run to more than 2$ caused a lot of "penny-investors" (I name them like this, to make my point clear, they bought under or around a dime) to sell all or some of their PTSC-shares, but there are still many shares outside, which were bought in the penny-range. Let's assume someone still has 300.000 shares bought for 0,10$ = 30k$ investment.
IF PTSC wants to step to NASDAQ (5$ minimum SP), this would mean, the shares are worth 1,5mio$.
A great deal for this investor, but a problem for a new investor.
Why? Well, how many investors do have 1,5mio$ to invest besides the Funds, Hegdes etc. ? This means, the average "NASDAQ-investors" will buy smaller pieces of the cake for much more money - 30$k investment will bring him only 6.000 shares. In this case you would need 50 NEW INVESTORS for this one "penny-investor". And now imagine, there are still hundreds of "penny-investors" out there...if they all decide to sell, if this stock starts to goes over 1$, 2$, then I see no way, how we can ever reach the 5$ to step to NASDAQ, just because we would have about 30-50 times more shareholders to substantiate this increase.
This means if you look at it from a mathematical view, the still existing "penny-investors" lower the average shareprice of ALL shares and thus make it harder to increase the shareprice at all (because of the shareprice/shares ratio as shown above). And under 5$ we have no help from investment funds, who could absorb those "penny-shares" with their investment power.
The only way to solve this problem is to buy back as many shares you can from these "penny-investors" in a range, where the difference between the price the shares where bought (= dime) is not that big: Look at the price today, which is only four times higher than a dime.
Hope I could show my point... GLTY
