Reader Interaction - 26 July 2006

Addressing a Pundit Commentary from the iHub Board...




26 July 2006
EB Reader & PK Correspondence


PK,

Are you aware of this seen on the iHub recently:

Posted by: Sputnik

It appears that the latest group of ITKG financiers is getting ready to sell there shares. The company just recently filed a post effective amendment with the SEC to announce the reselling (no compensation to the company) of some 11,000,000 shares. Why would they do that?



----------------------



Not of the post; but of the action (or rather intention of this action) yes.

I mentioned this to you in the past* as a matter of fact, my last post on the Blog was centered on this premise...

All companies have the ability to sell shares at one set price in order to raise capital for an event, operation, or objective. They sell these shares to an entity and that entity purchases them at a set price (sometimes at, or below market value). If below market value, then they have full rights to these shares, but cannot sell them for a set period of time (2 to 4 years) depending on the agreement behind the sale / purchase.

In this specific case -- rather than to feed into that specific posters pointed agenda to raise an alarm and cause panic -- think for a moment and imagine:

Why the company would want to raise capital at this specific time* (a time when they are focused on selling a product, and fine-tuning aspects surrounding their supply-chain) ??

PK sends...