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Burying Your Company's Stock
By William Cate
Burying Your Company's Stock by William Cate
Burying Your Company's Stock
By William Cate
July 2004
[http://home.earthlink.net/~beowulfinvestments/]
[http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
The reason that you must bury your public company's shares is to reduce your company's float. The
lower your public company's float, the lower your investor relations cost. [See my article The Proper
Use of Shares.] The buried shares are deducted from your float and the balance is called the effective
float. Your goal is to reduce the effective float to as near zero as possible. If your effective float is zero,
you need not find buyers for your float because there are no shareholders selling their stock in your
company. This, of course, is the ideal situation. I suggest that if you want your public company to
succeed in all aspects, you may want to structure your company's float like this.
Speculators, Not Investors
American stock buyers, on the whole, are speculators, not investors
[http://www.iht.com/articles/529443.htm]. They buy stock with the hope of quickly selling it at a profit.
Even the U.S. Government realizes that speculation doesn't lead to economic growth. Taxes for stock
buyers willing to hold their shares for at least one year are less than for those who speculate in the
Market and quickly sell their stock. The American Government's tax incentive hasn't altered the
speculative nature of the U.S. Market, because long term investors are consistent money losers. I've
often wondere