Gabard, I am using common sense, it doesn't matter to me what the shell company is trading at. From what I understand, the shell is not doing any business at the moment, brings no liability to the table, and a small amount of assets aside from their listing. Since FAMH will have complete ownership, the symbol won't change, and neither will the company, other than that it's off the OTC. I do not think that this company has squat of a chance to be fairly valued at industry average multiples, no less than the higher multiples of companies with agressive growth agendas.
This merger is, IMO, the quickest way for shareholders and their investment to be fairly valued by the market. On the OTC? No way IMO.
I agree that most stocks fall after a reverse split, but this is not the same IMO. Most companies that do a reverse do so only because their fundamentals are either weak or non existent. FAMH is profitable, and growing, and they can easily do 80MM in sales this year. I have been in FAMH since November, and I could easily leave the table with a nice profit, but I am willing to take the chance of my investment reaching a fair valuation than lingering on the OTC.
The merger is with a shell, one that isn't doing any business. Do you really think that the market would valuate the shell the same afterwards? FAMH will remain the same fundamental company, but will have a reduced float, access to institutional coverage, and wider exposure. The shell is no longer, and I'm willing to let the market decide what FAMH should be trading at on a fairer exchange. Now, if I thought Firamada was overvalued, I would be out the door. Maybe the price will not reflect the true value initially, but I'm sure that it will soon enough after listing.
Ed, with all due respect, why? Because you say so?
Jin. |
