The sad part I see with most holders of underperforming falling knives stocks that failed to have business traction is that they continue to cling to their shares, knowingly that it would be a matter of time before their company would call for a CR as revenues failed to materialise amidst ongoing (some high) fixed operating costs and dwindling cash positions. Some or rather most of these stocks have had their short great moments during which "positive" announcement fuelled speculative activity to drive their sp higher (although usually momentarily and unsustainable).
Sometimes a CR involves retail shareholders , sometimes not but regardless, shareholders will face dilution upon CR (capital raising) and with a bloated share register, it only means the sp would very likely continue to sink. That is not all, holders face a stark hobson's choice of whether to subscribe or not. If they don't, they feel they won't be able to average and face an immediate loss but if they do they are forced to commit more funds into a stock they're increasingly uncomfortable and more wary about. If you recall, Dennis Gartman's first rule is not to increase exposure to a losing (especially a big one) position [e.g at the extreme case, when Enron was tanking, someone thinks it is cheap and double down without realising the sinking ship was due to fraud that finally destroyed the company. Locally that would have been Big Un (BIG) ]. Holders would not have had to face this dilemma if they were ahead of the curve and cut loss at the time of momentary sp spike much earlier. Anticipation and being 'ahead of the curve' helps with a better outcome.
Today, Yojee (YOJ) announced instos and retail shareholders CR at 5c, a steep discount to the present price of 5.7c. The CR is to keep the company afloat for its working capital and continued operation and execution, with no business progress in sight. YOJ is one stock I have had previously cautioned as having a very bloated share register but which sp has yet to materially get down enough to the level of market cap that better align or commensurate with its business progress , so unfortunately IMO it has more legs to go south from here in a material way.
