RE:Time old storyHere quoted from the Reddit link I posted for TLDR's - the poster talks about how even a legitimate company with a good product can get tanked when certain individuals take advantage of the trust of management and other shareholders:
"
Then one morning, I get up, turn on the computer and see that their stock is down 60% !!! :O What had happened? Did a contract fall through? Was the camera rejected?
It turns out that the CEO, the engineers, the IR firms and everybody got side swiped by the companies largest shareholder which was a guy that owned the original public shell they reverse merged into.
If you watched the movie The Social Network (the Facebook movie), you would remember how they restructured the shares so that Zuckerberg retained the majority but his other partners were squeezed out?
What happened here is that behind everybodys back, the original shell owner pulled a restructuring and began dumping millions of shares onto the market.
Day after day, millions of share kept hitting the bid and the stock dropped down to 3c, 2c, 1c and lower.
With their shares knocked down to worthless, the company could not afford to raise any capital and fund further R&D. The mere act of knocking their shares down could have spooked the government agencies away from making a deal since they did not want to be involved with a company like that. No deals were coming, it was all over."
throwaway11 wrote: https://www.reddit.com/r/investing/comments/158vi7/comment/c7kc7jh/