Jed, I am very greatly saddened to hear of that filing. I hope it never happens again.
I would like to offer you a couple of tips on two resource companies that have fallen on hard times, what with the price of old down etc they emptied the treasury, but kept all their filings up to date. Now they are going to be taken over with what is called a 'vend-in' reverse back door takeover.
What does this mean?
It means their only asset is their good name and the current listing on whatever exchange/BB/pinks etc they are on. These are called listed issuers(of shares) in good standing with all their filings up to date with the SEC/OSC etc.
How can they use this? By selling out their listing as a shell listing to a private company with good potential that has sales and earnings. In effect the Private company gets listed as the old one and then they change the name to their name and keep going, listed, with sales and earnings and the share price is a reflection of the sales and earnings.
Let us say ABC Limited trades at 20 cents and is in good standing and has 1500 shareholders with 5 million shares.
They meet DEF Limited, who have sales of $10 million and earnings of $1 million a year. So the accountants and auditors determine that DEF Co is worth $15 million and so ABC Co issues 15 million shares at $1 per share to the owners of DEF Co. ABC Co now owns DEF Co. However the formers owners of DEF Co now have 15 million ABC Co shares and since there are only 20 million ABC shares(5M to start and 15M issued to buy DEF Co), then the owners of DEF Co are in control of ABC Co.(a reverse in effect, ABC buys something that takes it over.
Now with 20 million shares $1 million earnings that is 5 cents a share.
Well the stock promptly goes to 15-25 times earnings and settles in at $1 or so.
Well, it was 20 cents and is now $1. 5:1 in a few weeks.
Well there are two companies doing this as we speak.
One is Legend resources, LGDR at 20 cents
and Global resources GBSV at $1.50
I have 100,000 LGDR and 25,000 GBSV.
Do your own due diligence, but be ready to buy tomorrow as they will run this week(I hope) or next week.
Be happy with a 4:1 ratio on LGDR, will it make 5 or 10:1? beats me.
Be happy with 2:2 or 3:1 with GBSV as it has started it's climb already.
I have no connection to either of these two, other than as a shareholder.
Go to www.ragingbull.com there are boards for them, read them in detail as there is value in them, and if you register with ragingbull you get real time quotes for free.
If I get some more tips I will pass them to you and we may be able to bring you back to financial soundness.
Bill |
