Billions of Shares

I get a bit nervous when I look at a company's balance sheet and I see billions of shares outstanding. Of course, I'm not referring to companies such as Intel and Microsoft. They've done quite well for shareholders. I'm actually referring to small, OTCBB and Pink Sheet companies. This is not the final determining factor for me whether to invest or pass but billions of shares outstanding is not a positive attribute for a small company.

Investing requires an application of common sense. When I see billions of shares outstanding, I usually look for the following:

1. Financings that are not friendly to shareholders.

2. A company with a history of operations with no success.

As one of my business associates once said, "Either conclusion is not good for us."