A further word about Core Solutions, Inc. (OTCBB: CSOU). As we noted yesterday, Core Solutions recently has emerged as one of the most active stocks on the OTC Bulletin Board. There should be quite a few shares to sell since the Company registered 5 billion shares for employees and consultants on July 14, 2002. See Update: Core Solutions, Inc. – Only The Name Has Changed.
Making all of this even most astonishing is the fact that nine days earlier, on July 5th, the Company declared a 1 for 10,000 reverse-split of its common stock. That means that investors received one share of Core Solutions stock for every 10,000 shares they owned on July 5th. In other words, the approximately 1.5 billion shares that were outstanding on June 30, 2002, became a mere 150,000 shares. How likely is it that the Company didn’t anticipate that it would issue all of those new shares when it decided on the reverse-split?
That means existing shareholders weren’t just diluted by the 5 billion shares included in the Form S-8 filing - they were dwarfed. To those unfortunate investors, the 5 billion shares seemed like 50 trillion shares – the number of shares that would have been registered on that Form S-8 on a pre-split basis.
Again, we ask - who received those 5 billion shares? And who has been selling them relentlessly?
We would certainly like to know. And we suspect the regulators will also.
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