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Gold/Mining/Energy : Arcon Energy (MIDL Presently) The Ultimate Sleeper
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To: Ga Bard who wrote (1194)5/28/1998 5:01:00 AM
From: xdll  Read Replies (1) of 4142
 
GB,

Thanks for your reply. There are still have a few things that I am not confident about...

Patents - Keep in mind that you would never bother fighting a patent unless you felt there was value in it, so testing by exxon doesn't mean they will not contest it. Of course if they did contest it, it would legitimize the product and would give arcon a few years while the legal stuff goes on. It might be cheaper for them to settle. So at the current prices this isn't a big risk, just a potential cap on the upside.

Reverse Merger - I do not understand this at all. A reverse merger saves some costs and time but at a very high price. Keep in mind that an IPO is used to raise funds or gain exposure. Given what they are doing, the patents, the management team, the assets, and especially the story, I wouldn't think it that difficult for them to do an IPO. The advantages over a reverse merger: $$$$ they would be selling reasonably priced shares to the public and putting a large chunk of cash into the treasury. They would also be paying an investment bank big fees but this would come from the funds raised. And the investment house would help raise the profile of the firm.
Further, the risks would be reduced. (I know someone who after all the dd on a reverse merger ended up getting screwed. He had to sue the big 6 firm that audited and although he won, it resulted in several very miserable years in his life)
It just seems like a poor decision to me... comments?

Thanks again,

x
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