...Security deletions:
there is a stock VIOL, failure to comply with that 152c rule.
What happens to that stock, now?
RMILians may be interested. ...
Actually, both of the stocks (MINE and VIOL) in the 'Security Deletions' section of the referenced OTC Bulletin Board 'Daily List', may have some relevance to RMILians. MINE (Golden Eagle International Inc) was deleted from the BB due to its temporary trading suspension by the SEC (See: sec.gov ). I think this comes very close to answering the question, I asked in #reply-4578895 : "Is RMIL currently on the OTC BB?" Based on the MINE example, it does appear that stocks are dropped from the BB after a SEC halt. (If one wants to be extra cautious, check back with otcbb.com after the end of the MINE halt on July 7, 1998 to see if they are listed under 'Additions' or 'Anticipated Additions'. However, I doubt if you'll see them back on the BB until they comply with 15c2-11.)
Concerning your original question about what happens to a stock that gets delisted from the OTC BB, let me give a relatively brief answer. Later if there are any significant additions, error corrections or modifications, I may give a longer response:
As far as I've been able to determine, virtually any stock that isn't halted by the SEC or under an exchange/NASDAQ suspension can be "traded" in the grey market (variously described as the taking place via the Pink Sheets, Instinet, ECNs. matching of buy/sell orders within a brokerage, matching the old fashioned way - via phone calls, etc.). Some stocks come off an SEC temporary suspension and immediately begin "trading" in the grey market prior to any eventual 15c2-11 approval. Recent examples are IBUY, EOSC, IHIN and SLUP. Others, like RMIL, come off a halt and barely ever "trade". IMO the difference between these two types of stocks results principally from two factors:
1. Are there enough buyers and enough sellers with bids or asks in a narrow enough price range to make matching of buyers and sellers reasonably practical? Without market makers, there is no one who automatically will take the other end of your trade at a price you might find reasonable. Motivation/investor psychology is undoubtedly a factor for both buyers and sellers . In the case of RMIL there seem to be few who wish to sell (this may have a lot to do with the second factor listed below) and interestingly (in light of the supposed 5-6 million short shares) very few who are interested in buying. (In fairness, I suppose someone (a non market maker) with a very small short position would also be subject to the factor in the next paragraph.)
2. Does the trade make economic sense? For example (as has been pointed out by many in connection with the '300 shares'), if you hold a small stake of a nearly valueless stock, the sale commissions may not even be covered by the sale proceeds. Or if the sale proceeds cover the commission, but only leave you enough for a meal at an inexpensive restaurant, you might be tempted to hold onto the stock hoping for a price recovery. My guess is that in practice the threshold price for such a stock to "trade" with reasonable frequency on the grey market seems to be a price of about $1.00 or more (post halt or other reason for delisting) coupled with many owners holding positions in the multiple 100's. In this situation an owner of several hundred shares will find it worthwhile to try to sell and there is an indication to potential buyers of some residual worth despite the stock's SEC (or other) problems.
Obviously, the above explanations are JMO (and as a result this has many fewer links than my typical reply. <g>).
P.S. I guess even the 'brief' answer isn't all that brief. |
