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.
Read more about this topic: Stock Dilution
Famous quotes containing the word share:
“Taking a good mouthful, I felt as though I had taken liquid fire; the tomato was chile colorado, or red pepper, of the purest kind. It nearly killed me, and I saw Gómez’ eyes twinkle for he saw that his share of supper was increased.”
—For the State of California, U.S. public relief program (1935-1943)