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Microcap & Penny Stocks : Consoldated Capital Of North America (CDNO)
CDNO 0.003000.0%Dec 22 10:52 AM EST
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To: virus who wrote ()2/15/2000 5:19:00 PM
From: InOverMyHead  Read Replies (1) of 1078
 
I don't see any 8-K as of yet. If the creditors haven't converted by today, they don't have any plans to convert. Why would they take half as many shares? Obviously, the creditors see more value in the remaining assets of CDNO than they do in this RM. You really can't blame the creditors.

Example:

$15 million worth of debt at $.02 means 750 million shares. Add the current 130 million shares and that gives you 880 million shares O/S. The 750 million shares would be restricted (for one year) stock.

If you were a creditor with $250,000 of debt to collect, and you convert to shares, you will have 12.5 million shares. The company would have to do a minimum of a 10-1 reverse split to get the O/S down to a reasonable level. That would leave you with 1.25 million shares. Your current value is (1.25 million shares X $.125) $156,250.00. You start out in the whole by almost $100,000. How do you explain that to your own investors?

I know that some of you will say that the stock will go up in price to $1.25 with a 10-1 reverse split. Initially, it would, but stocks that do an RS ALMOST always return to the pre-split price after the reverse split takes place. CDNO could be the exception to the rule, but that's why they call it risk-taking.

IOMH
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