Stock question..

[draggar]

A few months ago (well, more than a few) I bought 4,000 shares of a penny stock (for fun, but it seemed like something I'd want to invest in).

I just got a proxy ballot in the mail (normal) and I'm not sure about one item.

They want to increase their stock shares from 100 million to 500 million. They are NOT calling it a split. My question is - will I end up with 20,000 shares (5x what I had) or will I still only have my 4,000 shares and when the market gets flooded with 400 million extra shares I'll watch the price plummet (this will happen either way but at least if the former happens I'll end up with the same amount of $$).

 

[Gerry]

It is an effort for the company to sell more shares to raise more capital. You get nothing more than what you own although I am sure they would appreciate you purchasing the new 4 million shares.

 

[draggar]

Considering the current price and what it might be after they add 400 million shares buying 4 million shares might be cheap.

 

[Kazzia]

You cant just throw more shares into the mix like the federal reserve (ha ha) bank does. If they did, then the value would decrease proportionately (unlike the fed). So you will have more shares at the split price - same value.