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Microcap & Penny Stocks : OTC Shell Search and DD... -- Ignore unavailable to you. Want to Upgrade?

To: Coachman who wrote (670)	3/18/2000 6:13:00 PM
From: chalu2	Respond to of 858

I think there is considerable confusion on this issue. I have practiced as a securities lawyer, and it is true that the shares received by a private company's shareholders in a shell merger do not automatically become free trading. They either must be registered or sold pursuant to an SEC exemption, like Rule 144, which allows shareholders who have held for a certain length of time to sell shares into the market pursuant to a formula. None of this means, however, that shell companies cannot, as always, issue shares to acquire operating companies. Shell companies that effect mergers with good private companies will continue to see their shares increase in value; the private company subsequent to the merger will have new opportunities to raise money. The "shell game" is alive and well so long as SEC rules are followed.