What does this mean?

**Scanner** · 06-24-2011, 06:45 AM

Wait. . .it was suspended and then trading resumed. WTF?

It dropped .07 on opening. . .not huge.

**kv968** · 06-25-2011, 05:03 AM

Scanner, I know you like your silver, but why would you put a "significant part of my portfolio" in a penny stock mining company that trades OTC and doesn't make money. I'm all for speculation but that's taking it to the extreme if you ask me. Hope it works out for you though.

**humandraydel** · 06-25-2011, 08:49 AM

The deal values ECU as $0.97 per share. So that's why the price has gone down. Essentially, you are voting to sell your shares for $0.97 each. Of course, you'll be paid with the "new" company stock which you could then sell if you wanted to.

**Scanner** · 06-27-2011, 01:42 PM

KV,

Because I am deploying my portfolio differently - I am in a lot of cash too so I can up the risk a bit.

**kv968** · 06-28-2011, 06:22 AM

Originally posted by Scanner View Post

KV,

Because I am deploying my portfolio differently - I am in a lot of cash too so I can up the risk a bit.

You are deploying it differently I give you that. You might be better off deploying it on red or black at the roulette wheel down in AC though

As always, I wish you luck and if you make a quick, decent profit don't be scared to take a little or all of it.

**Scanner** · 06-28-2011, 08:03 AM

KV,

Who says you have to mitigate and accept risk by an even deployment across asset classes?

Why not be a little "bipolar" soemtimes and have a lot of money riding on 1 stock but then the rest in cash?

Why all the 40/30/20/10 stuff and whatnot?

Actually, I have made a paper profit thusfar - bought in at $.78 and it's trading around $.95.

I totally admit I get frozen and amateurish on when to take profits though and appreciate advice and input.

**jteezie** · 06-29-2011, 12:07 AM

Here's the math:

Golden has a market capitalization that equals
Price per share x total shares in market = market cap... lets say $100

ECU has a similar market capitalization
Price per share x total shares in market = market cap... lets say $150

So the new New Growing Silver company is now market cap = $250
The company can choose how many shares it wants to issue. Lets say they issue 1000 shares. That gives us:
$250/1000 = $.25 per share

Lets say you held $5 worth of Golden. You now get $5/.25 = 20 shares new company.

All in all, you still own $5 before and after. This does not impact you at all... unless...

New Growing Silver decides to issue 1000 shares to the previous stock holders and it ALSO issues 100 more in stock options or common stock to the new partners that are running the company. This pretty much means the $250 is divided into 1100 shares = $.227 cents

This is called DILUTION. You now actually own 20 shares x $.227 = $4.55

**Scanner** · 07-01-2011, 06:22 AM

Ah, so in that case, I would vote against such an agreement, if they diluted my future holdings of said company.

Right?

**jteezie** · 07-01-2011, 10:38 PM

It's a lot more complex than that because there are many many other factors. They obviously think they will find synergies and make more profits, otherwise they wouldn't merge. That might offset any potential costs. Hard to say. I was just explaining one very specific aspect of the situation.

What does this mean?