Some thoughts... Let's look at it from an arbitrage POV. Post ONTV split you will receive ONE(1) share of ONTV for every 19.697 SSTY shares you own. Todays closing price of ONTV is .34 so .34/19.697 yields a current valuation of SSTY at 0.0173 per share. Todays close was .0018 or 9.4X times under valuation, or, assuming the current price of SSTY is valid, ONTV is only worth 0.036 cents per share. The market denies through arbitrage the 0.036 price for ONTV. The market is really saying that, in the absence of other valuations and more meaningful numbers, at least the prior market high of SSTY prior to the suspension (0.014) is where the arbitrage valuation of the stock dividend is currently being placed.
As SSTY returns to the pinks I expect a rapid return to those levels to test the market. If ONTV rises I expect the SSTY initial retirn to pinks price to rise as well.
Subsequent contract dollar numbers will alter both stock values based on their respective valuations thereafter. ONTV, with a float of only 50MM shares for the first year, will be a real mover. SSTY, with very little expense except G&A, will be a money machine for future M&A. Both should do exceptionally well IMO.
If a Fortune 500 company does attempt to buy them out, the exclusive license from SSTY to ONTV makes a hostile T.O. of ONTV a low probability. A right to cancel must be included in the license. The number of shares held by SSTY management is in effect a poison pill for SSTY hostile T.O. attempts. Any way you look at this, unless someone just flat steals the technology from SSTY, and then streals all the customers, and does it with goodwill in China, SSTY shareholders should do real well IMO. |
