Petro Rio S.A. HRTPF

Got my non-answer from IR

[robnhood]

"

"The securities issued by HRTP are the Common Shares listed and traded under the ticker “HRTP3” at BM&FBOVESPA and the Canadian Global Depositary Shares (GDSs) listed and traded under the ticker “HRP” at TSX-V.

The increase on the number of outstanding GDSs was part of a natural expansion, mostly due to the interest of Canadian investors in Oil & Gas Companies.

The ratio between the Common Shares and the Canadian GDSs is 1 Common Share is equivalent to 2 GDSs. Therefore, for each new GDS that is bought in TSX-V (HRP), there will be 0,5 corresponding common shares (HRTP3).

Best regards,"

Huh????

[DrillaHill]

"The increase on the number of outstanding GDSs was part of a natural expansion, mostly due to the interest of Canadian investors in Oil & Gas Companies. "https://thismatter.com/money/stocks/global-depositary-receipts.htmDepositary receipts can be created or canceled depending on supply and demand. When shares are created, more corporate stock of the issuer is purchased and placed in

[robnhood]

I admit that I don't exactly understand. EG; Where does the money for all of these extra created shares go? It seems that no matter how many shares are bought of the GDS's there will be no effect on the price of HRTP3. What would happen if the oustanding GDS share count surpassed that of the underlying stock?  Could they just keep creating new stock forever?    

[robnhood]

In other words, this sounds like a sponsoring broker could naked short the GDS to eternity. One would assume that the seller of the GDS should be required to have an offset on the HRTP3.

[robnhood]

OK, I reread your post again for the fifth time. It does appear that there is an offsetting purchase of the HRTP3.  So if the share count of the GDS goes up, how come the HRTP3 does not go down. Still don't get it.

[rob926]

Makes sense since the Canadian shares are being traded more and more. I do believe every extra Canadian share that is added they have to take Brazilian shares away. They are not adding an diluting shares or HRT would be getting the money for the nw shares.

[fritz3]

There are 296,258,289 HRT shares. A certain part of these shares trades in Toronto, not directly, but in form of the GDS. That 'certain part' can change. The total number of shares remains the same. Every time two GDS are 'created' in Toronto one original share in Brazil is 'shut away'. The process can be reversed.

[VanWilder1]

GDS shares are NON-Dilutive.   They do not increase the Float or Outstanding share count.  It is simply an exchange program allowing companies to trade on other exchanges. Let's finally put this issue to bed, as these questions have been answered for nearly 2 years now.    1000's of companies trade with GDS shares, it is nothing new.