Tuesday, February 28, 2017

Crooked Capitalism- Greed, fraud at its best (worst, I mean) in a capitalist society. Have you heard about GBSN (Great Basin Scientific In) stock?

Probably most of us know about stocks and stock markets. It is one place which offers possibility to get rich without any hard work.
Let us imagine about a stock. Over two years, its price has changed between $460,800,000  and $0.0008 over just two and a half years! No, I have not made any mistake with zeros or decimal points in the numbers! Great Basin Scientific Inc (NASD Stock Symbol GBSN) has actually fluctuated between these two numbers. See the chart below! Actually, the price movement is in the opposite direction! The company stock has gone through multiple reverse splits and if you adjust price of the original stock for every split, the day the stock GSBN first traded, it was $460,800,000! Almost half a billion! Do you know that is the price of the stock today? It is not even a penny!!! It is traded at $.0008! That means, you can buy 10,000 stocks of GBSN today for 8 pennies!!!

GBSN stock price history

Reverse Split history: GBSN
Dec 28, 2016 1: 300 sharesSep 16, 2016 1:80 shares
March 31, 2016. This was a 1 for 35 
December 14, 2015 1:60 shares


Do you know what these reverse splits mean? If you had 50,400,000 stock on day#1, you would be left with 1 stock today!! The power of multiplications LOL!
This numbers are insane. They are even more crazy when you find the value of that stock is $.0008 today! Didn't I say you can buy 10,000 stocks today for 8 pennies! And now the biggest shock of this one of the most crooked games in capitalist society! The 8 pennies you spend today to buy 10000 stocks of GBSN are worth 504,000,000,000 original stocks!!! That is like you had 504 billion stocks in GBSN on the day it traded! Can you imagine who much money investors would have lost in this game?

Now in this whole game who made money? Not investors. I don't think any investor would have made even a penny. Maybe some lucky traders made some money. However most money was made by -the founders, the management, the companies (which are most likely related entities) which bought convertible bonds of GBSN!
Here is how much pay the executives take home (as per Yahoo Finance)
GBSN executives


How is this possible? As long as there are investors who like to buy cheap, penny stocks, or stocks based on tips by vested interested or tips by strangers on various message boards, there are always fraudsters who are out there to cheat them.

If you are curious about such scams work, please see the details below! Don't forget to read the readers' comments too at the bottom of the page!
http://seekingalpha.com/article/4010176-great-basin-scientific-toxic-financing-never-ends

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