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Microcap & Penny Stocks : CBQ Inc CBQI
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To: David O'Berry who wrote (327)4/30/1999 11:06:00 PM
From: FARRIS  Read Replies (3) of 1101
 
You are right about what you say in regard to "debs." Your reference is to BONDS issued for less than 270 days that needent be reported to the SEC or anyone else for that matter. They have very beneficial conversion rates -- for the buyers of the BOND that is.
HOWEVER, in this case what happened is more clear cut. ANyone who has been in the BB game for very long has seen or felt what these shorters are feeling and stupidly reacting to.
Here is my understanding and how I read this situation.
1. Pierce et al take over a "clean" shell. Nothing unusual about that.
2. The previous owners of the shell and the shareholders have basically given up on it. BUT the owners only sell a large percentage to the new controlers of the shell -- hoping to make it big when the new company comes in and makes money.
3. The new controlers do the smart thing and reverse split the dog $hit out of the original stock. Nothin illegal about doing that IF they had controling interest during the vote. Oh yea -- no fully reporting status helps as well.
4. The old owners and shareholders take it in the shorts and no one is happy -- but the new shareholders and controlers are because they have gained stronger if not absolute control of the shell.
5. Reverse MERGER takes place.
6. Old owners are steamed and sell off whatever is left of their once large holding in hopes of tanking the stock. Then, they go ahead and take it a stpe further and go short -- WAY short. HOW DO THEY DO THIS? Probably because their broker was not aware of the reverse SPLIT and took the shares and sold them in good faith. (Been there and done that myself)
7. Broker calls old owners and gives them the bad news. But it is not so bad since they are still profitable. HOWEVER, they must cover with shares, NOT CASH. 240,000 short on a 300-500,000 float. I DONT THINK SO!
8. This explains the 311,000 "lost" shareholders as well. These people gave up on this stock a long time ago and may well never be heard from again.
9. The old owners realize they are screwed and start reaching for whatever they think they can.
10. Did Pierce promise anything to these fellows? If it is not in writing and there is no canceled check or contract -- they are flatly SCREWED.

FWIW,
Eric
THIS HAS ALL HAPPENED BEFORE -- THIS IS NOT AN ENTIRELY UNIQUE SITUATION. Watch and learn or enjoy the ride... Your choice.
Sorry for the spelling -- I could care less...
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