How to sell off shareholders equity.Plan of Action:
1., Dilute the stock by raising capital through private placements or public placements. About 300 million shares should do as long as there is also lots of warrants and options outstanding.
2. Do a reverse split. If this is prior to good news, it helps. This caps the stock price and ensures only long term holders will want to maintain a position.
3. Get exposure for the stock in ruthless markets like Nasdaq that will guarantee volatility. This will clear off shareholders who were hoping for the spectacular gains possible on a penny stock, the swing traders, and those who trade on news etc.
4. Now issue more stock at the new price, preferably to institutions, mutual funds etc. The stock is now held mainly by institutions and large shareholders.. Institutions are happy with a 10 % to12% annual gain. This beats the market handily. It stabilizes the stock price once again. And It also assures that there is a ready market for new issues of stock to fund product development following a well conceived and executed business plan.
5. Now that the company is out of penny stock status everything changes. It now has a following of institutions that get lucrative seats on the board. It has brokerage firms who are guaranteed of future business in raising capital. And finally management is now in the big leagues and gets their salary jacked.