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Strategies & Market Trends : The DD Maven

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From: creede	4/15/2006 1:33:32 AM
	of 736

Why do real companies now choose the pinks? Message 22358875 To: peter michaelson who wrote (140) 4/14/2006 8:40:44 PM From: rrufff Read Replies (1) of 148 Hi Peter, Until about a year and a half ago, I would have agreed with you. I had only rarely bought or even looked at a pink sheeter. Then things changed. The Sorbanes Oxley requirements caused many of the stocks that I followed to go from an exchange or OTC BB to the pinks. I doubt that LBWR will go off the pink sheets for awhile. It doesn't make sense until they are further along in their business plan. Time and money is best spent developing the business and it is easier to increase the price per share at this point as you have very interested buyers in limited quantities. It has not been promoted to the normal pink MOMO boards. So, share price rise is now a function of great business news rather than promotion, which is a stronger foundation and less likely to be p&d. With the costs of Sorbanes Oxley, many small companies are choosing the pink sheets for this reason alone. I've seen estimates in the million dollar range and this is a huge number for a company just staring out. Further, the pinksheets are changing. See the recent PR on pinksheets.com where they are planning to have tiered lists of companies, ranked according to the availability of financial information and transparency. This is a very good thing as there will less opportunity for scamming. The next financial step would likely be for LBWR to have a MM file a Form 2-11 with the NASD so that a real market can develop. This makes sense if increased awareness creates more volume. Right now trades are sporadic with a wide spread. For this to happen, they don't need to comply with SOX and they don't need audited financials as unaudited are sufficient, together with information that is reasonably calculated so MM's and the public have required information under the rule. GB-ND c

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