In last trading session, the stock price of Eline Entertainment Group, Inc. (OTCMKTS:EEGI) gains more than 33% to close the day at $0.00160. The green close came at a share volume of 26.13 million compared to average share volume of 5.34 million.
The management speaks
A couple of months ago, Mr. Emmanuel Gyamfi, who is the interim CEO of Eline issued a letter to all its shareholders, wherein it revealed that he has received many inquiry emails about the firm’s stock being offered in the open market. Through this letter, the CEO took the initiative for helping shareholders know what actually the story with stock dilution is. The price fluctuation and stock selling can be stated as a result of a big plan that shareholders will be delighted about.
The CEO of Eline stated that the volatility recorded in the stock highlights that a turnaround in structure is around the corner. He added that the first issue he would like to resolve is whether or not the stock selling through Market Makers is a sign of dilution.
Gyamfi reported that there is no stock dilution happening for the company. Eline boasts a float of close to one-third of its outstanding shares. It suggest there are adequate restricted shares, and since the firm has not opted for many stock issuances, a large chunk of them is just twelve months old. This shows investors are within their privileges to sell the shares.
In fact, the stock of a non-reporting entity are generally routed through two market makers (VFIN and VNDM) as they accept stocks in certificate form. However in last few years, the two entities have extended their activities scope. It is important to consider this fact before coming to the inference that stock sale through market makers VFIN and VNDM are routinely negative. The course has transformed and so has the concerns.