Share Dilution Scams
A share dilution scam happens when a company, typically traded in unregulated markets such as the OTC Bulletin Board and the Pink Sheets, repeatedly issues a massive amount of shares into the market (using follow-on offerings) for no particular reason, considerably devaluing share prices until they become almost worthless, causing huge losses to shareholders. Then, after share prices are at or near the minimum price a stock can trade and the share float has increased to an unsustainable level, those fraudulent companies tend to reverse split and continue repeating the same scheme.
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Famous quotes containing the word share:
“O hurry to the ragged wood, for there
I will drive all those lovers out and cry
O my share of the world, O yellow hair!
No one has ever loved but you and I.”
—William Butler Yeats (1865–1939)