Cycle of penny stock Collated by xela.hc forrestfield...

Cycle of penny stock
Collated by xela.hc
forrestfield
Date:09/03/16
Time:12:27:40
Post #:17226633
Okay apart from joke without offending anyone and providing any names of the stocks or being personal, we should sum up this discussion... I mean we are talking some serious rinse and repeat cycle here... lets try to capture it in steps... lets call it story of penny dreadful:
1. listing at asx through IPO at 20c raising decent cash with an exciting project (right sector).
2. Early success with exploration and exit for IPO participants at a nice premium.
3. Capital raising required for further exploration to find the true potential.
4. A discount along with 1 free attaching option for every two shares. Capital raise over subscribed.
5. Share price appreciation with volume leading to further exploration.
6. Share price collapsing before the poor results hitting the market.
7. Poor results does not mean project has no value... further exploration being done to explore the real value and potential of the project.
8. No significant results again... Share price keep collapsing.
9. Company is left with minimum cash. Appendix 5b query causing panic hence capital raise discussions.
10. NO one willing to put their hands in the pocket. Hence massive discount to raise capital. Share price collapses further.
11. At this stage, company and its investors know the project is worthless. Hence strategic review is required.
12. Couple of directors resigning from the board. New directors being appointed who have expertise in certain new trend.
14. As a result of the strategic review, company will now consider new projects...
15. To persue these exciting opportunities, company will seek share holders approval to restructure the company. This will include capital raising. However, heavy discount will be offered which means share price will further decrease.
16. As company has no cash left, company will issue con notes for working capital.
17. Restructing done, capital raised, name changed and company is looking for the hottest sector and project possible.
18. Story will become sexy again like the first time. Share price will rise, investors who participated in the initial capital along with intelligent punters following the trend will make gains.
RINSE AND REPEAT.... I have no intention to offend anyone so apologies in advance if you have been part of this cycle... I have been involved with at least 5 by myself during my early days of trading...