SEGB (OTC) and V.CPT less than 1 month before they both move imo
For those that aren't familiar with the story....
The two stocks that will move imo are CPT (this one I've owned for 5 years) I know the story real well, it's a bit confusing but I will explain the main parts and it's subsidiary SEGB OTC BB (SE Global).
Only thing is I'm not sure of when they will move but it could be any day now and if it doesn't move by April 16th it will certainly start doing so soon after, two important dates for CPT are March 31st and April 16th.
stockhouse.com
I have 20K @ .60 cents so I'm not in that much cheaper than the market price so please believe me I'm not trying to sell anyone on anything here.
It use to be somewhat confusing before for me but now that I've disected it when I look at the transcation it seems quite simple and can't miss imo.
V.CPT subsidiary company SEGB ($2.30 US) trades on the OTC BB
stockhouse.com
SEGB has about 17.5 million shares of which CPT owns 82% of them (14.5 million).
This company SEGB is going to merge with a huge company in China called Sun Media (does about 320 million dollars in revenues a year), Sun Media has 11 media related companies in Asia and its portfolio includes 31 magazine titles, 3 newspapers, 10 broadcasting television channels, 3 websites and various equity stakes in internet, multimedia products, education and college, sports and racing, and music and entertainment. SMIH currently operates in 15 cities across 9 counties and regions. So they are huge, the guy that runs Sun Media (Bruno Wu) use to also be a part of SINA another company that is similar to Sun Media
stockhouse.com
SINA was one time a $50/us stock trading at $30/us now.
Anyways Bruno wants to take his Sun Media company to the Nasdaq so they're merging their assets with SEGB, the vote for this to happen takes place March 31st, since CPT is the majority shareholder with 82% the deal is going though.
After the merge they will be doing a reverse split (2 for 1) with the shares to get the stock price up (you need $5.00 to be on the Nasdaq). There will be 320 million shares and post split 160 million shares, when it comes down to the new shares it will be restricted stock for minimum 2 years, then subject to dribble out rule omposed by the SEC. They can only sell 1% of total issued and outstanding per quarter, non-cumulative. There is no fear of dilution.
So currently CPT has 14.5 million shares of SEGB @ 2.30, post reverse split they will have 7.25 million shares @ $4.60, the trading float will only be about 1.5 million on SEGB.
If CPT were to sell all 7.25 million shares @ $4.60 they would get approx 33 million US dollars cash ($40 million CDN), so that alone will give CPT a nice increase from their current share price of .70 cents as they'll have all this cash in the bank.
However I'm hearing once SEGB qualifies for the Nasdaq that Bruno will be doing a financing at $8.00-12.00. So that is over a double at these prices for SEGB and for CPT that could potentially mean them getting $72.5 million USD in cash (7.25 million shares of SEGB @ $10.00 US) which would be $87 million Canadian or $2.42 cash/share.
My understanding is that they're keeping CPT in this trading range until warrants expire.
There was a private placement last year April 16th 2004 that raised about 3 million (which I participated in)
cag-global.com
cag-global.com
I got shares at .60 cents and warrants at .70 cents that expire April 16th next month.
Hypothetically if we were trading in the $.80-$1.00 range by April 16th I would imagine most people would exercise their warrants (including myself) and I'm guessing quite a few would dump them and just ride their pp shares or vise versa dump their pp shares, exercise their warrants and ride them.
First I thought why wouldn't CPT want people to exercise their warrants get some more cash in their hands. I concluded that they don't want to dilute CPT any further or need the cash. As you know with them owning so many SEGB shares they will be looking at a healthy cash position if they sell those shares after the merge.
The other big key in all of this is their other subsidiary CIBT
cibtcorp.com
CIBT is private right now but I'm hearing there are a lot of big players (like Sun Media) knocking on the door wanting to have a piece of CIBT by taking an equity position and gaining some market share in China. That would result in something similar that we're seeing with SEGB.
Also CPT is very close to qualifiying for the TSE, once this merge happens they will meet all requirements and I'm expecting an announcement on that front also.
These two things are going to be really big for CPT, I plan on being fully loaded with SEGB before March 31st then buying my final buy on CPT before April 16th..
In terms of price targets I think SEGB is an easy double if not more post reverse split from the $5.00 price, time frame I have no clue but it could move quickly.
CPT I think will be $2.00-$3.00 by year end, look for it to get out of the .70 cent range real fast after April 16th and might even move before if they start releasing news on CIBT also
Either way in my opinion it's a very safe gamble to pick some up at .70 cents and wait it out a few months and/or pick up some SEGB too to be safe as I don't know which one will have the greater move pct wise but they both will move for sure.
I bought some more SEGB today at 2.30.
If you have any questions fire away, I've owned/followed this company for 5 years.
Cheers
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