Propanc Health Group Corp (OTCMKTS:PPCH) Explodes After Up-listing

Propanc Health Group Corp (OTCMKTS:PPCH) added 27.66% to its market value yesterday on heavy volume, after Moving to a higher tier of the OTC Markets Exchange.

This turn of events certainly looks good, as it suggests that investors will have a better view at PPCH affairs, now that it is traded on a more strictly regulated and prestigious tier of the OTC Markets.

While this fact seems reassuring in and of itself, it doesn’t look likely that it alone caused PPCH to explode nearly 30% up the charts after more than 16 million shares changed hands.

No, the heavy buying that marked yesterday’s session as significant is at least in part due to the company’s announcement that it has reduced its “authorized shares of common stock by 80%, down from 10 billion to 2 billion shares”.

At first glance this news is very important, as it hints at an end to the threat that dilution represents to investor value. Or does it?

First off, although the announcement was made an official filing hasn’t yet hit the web, and until one does, we’ll just have to take PPCH‘s word that it has actually taken place.

Second, a glance at the company’s latest reports determines that as of May 15, 2015. PPCH had 335 million shares of common stock issued and outstanding. So if that number has remained the same since then – which is unlikely, but that’s another matter altogether – PPCH will have to issue FIVE TIMES AS MANY SHARES AS IT CURRENTLY HAS, before the decrease actually becomes relevant.

Long story short – there is plenty of room for investor value crushing conversions. Which means that investors that are currently buying PPCH shares because they think that the company’s tendency toward toxic funding is no longer a problem could very well be in for a nasty surprise in the near future.