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Strategies & Market Trends : Joe Copia's daytrades/investments and thoughts
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To: Soccrates who wrote (12990)3/5/1999 9:04:00 PM
From: Pat MacD  Read Replies (1) of 25711
 
Congratulations on your timing, profit is profit.
I am attempting to rationalize the value of a OTC shell(pces) with the potential access to 2million dollars as compared to a typical empty shell that has the opportunity to raise a million dollars through a 504 financing. I have seen many OTC shells with very small floats and willing potential investors to participate in the private placement if a decent project has been identified.
A couple of points to consider with this particular opportunity is that any candidate with a decent business plan and product may request a reverse split prior to vending in their business.
Would the candidate want cash or shares as payment, if shares at what value would they place on the shares today. If it was a cash purchase, then is there enough working capital or is another financing required.
(more dilution)
Can the pref holders veto any deal that is presented. Presently I do not know the terms of the prefs. (Important information to know.)
In some cases there is value placed on the shell based upon the aver share price that has traded in past months. The rationale is that shareholders would not readily sell below their cost base.
In an effort to minimize this post, many questions and details can only be presumed at this point. I would definitely wait for the prospect to be identified and terms disclosed prior to any further investment.
These are just my opinions. Good Luck
Pat

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