The Real Micro-penny- Less then one penny!! Message Board

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Microcap & Penny Stocks : The Real Micro-penny- Less then one penny!!

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To: Daniel Miller who wrote (70)	6/25/1998 5:57:00 PM
From: DRRISK	Read Replies (2) of 906

Daniel, Your openness to learn is admirable and I know a great deal on the shell game but your purpose on this thread is to make money now. Shells are not a hear and now issue unless you have close ties to all the details of the Shell and its trustee if it is being cleaned up in a Bankruptcy. A clean shell has a marketvalue to a private company but little value to a shareholder due to the future dilution a merged company will exert on existing shareholders, so as to minimize their equity in the new co. The variables in this are enormous and subject to watching the bankruptcy proceeding of the old shell company and the final disposition of the old co. When the shell is cleaned up the trustee in an ideal world, if honest, will attempt to find a good company to merge into the shell and the existing shareholders will get whatever the best deal a trustee can work out for them (usually not very good). This deal has the function of creating newco with x-shares and of those x-shares the old co shareholders become x% holders of the newco stock that is issued. The oldco shareholders are typically invested at high prices and never recoup their losses unless newco is a great company which they are usually not, because if they were they would, typically, not be using this format to become public. If you bought shares when oldco was going out at 1-2cents or if you buy now you have the unlikely chance of being made whole if you are careful and do not buy a pig in a poke. The trustee is the critcal person to speak to and they are virtually impossible to get a hold of. I know a few and their job is at best unpleasant and money you pour down this rat hole is almost always dead money for years if not forever. The permutations on the above are exponential and the risks are worse then exponential. Nonetheless there are some opportunities but you would have to be prepared to loose all your money on 95 out of the 100 shells you invested in at the point in which you find them. As to the purpose of this thread there are many companies that are going through delisting that are going concerns that desire to become relisted and trade at micro or near micro levels IE: 1-5 cents. These have often been the subject of jackass irresponsible financing or some other malfeasant corporate stupidity but have value and are struggling to get back in the game. NASD has changed the rules and is delisting companies that do not meet their stricter criteria. The fate of these orphans remains to be seen many have done reverse splits only to dwindle back under $1.00. This area of orphan stocks is fertile for risking your hard earned pennies but the oldest saying in the book about a "sucker's born every second" applies to these companies and they are usually the denizens of flimflam artists who are adept at what they do. Good luck, DrRisk will follow, all the above IMHO

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