Categories

Login Status

You are not logged in.

Polls

Is Facebook overvalued at $40/share?

View Results

Loading ... Loading ...

Calendar

September 2017
M T W T F S S
« Oct    
 123
45678910
11121314151617
18192021222324
252627282930  

Suckers! Public offerings

                You can always tell when the shit is about to hit the fan and the market is about to dive.  A herd of worthless companies and their thieving investment banker (usually Goldman Sachs) start to offer the public shares of stocks that have been previously approved for issuing.  This usually happens after companies have reported two consecutive growth quarters and an unusually long bull market, but are now expecting to disappoint.  So basically, they sell you shares when stocks are high and later buy at a cheaper price (treasury stock).  The benefit to a company for buying stocks and placing them into treasury is that they will have fewer shares outstanding and therefore will report higher earnings.  The benefit of public offerings is that the company receives cash up front AND if they are reporting a loss, it gets split into a greater number of outstanding shares therefore reducing the loss per share.  Based on this common knowledge, one can assume that now Bank of America, Citi and Goldman are working together to raise capital, you know that earnings or lack of will be getting diluted by a greater number of shares.

This content is restricted to site members. If you are an existing user, please login. New users may register below.

Existing Users Log In
 Remember Me  
New User Registration
*Required field

Comments are closed.