is it a good trade robbbbbbb kevi, page-26

Hi Major

I am aware that company received cash in return, but nevertheless there is a dilution. I know that diultion is NOT 1 to 2.44 (although some HC posters seem to incorrectly think that is the case when SPP occurs). I have posted once (on a GMG thread, I think) a formula that calculates exactly the dilution factor based on discount to the existing SP and the number of new and old shares. My view would be that these factors have to be applied to the charts of stocks that raised capital via placements.

An exagerrated example of this type of effect would be that if a hypothetical company did a 1 for 10 swap, one would have to incorporate this in the chart. In other words, the SP in the later part of the chart would have to be divided by 10 relative to the old SP from the date that the swap has occurred.

BTW 2.44 is the ratio of new shares vs old shares if I got my early morning calcs right for FKP.

Cheers