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Microcap & Penny Stocks : Private companies using reverse process to go public -- Ignore unavailable to you. Want to Upgrade?

To: P.S.N. who wrote (16)	4/29/1998 10:00:00 PM
From: Chloe R	Read Replies (1) \| Respond to of 62

PSN Thanks, I'll check those out in more detail. As for reverse splits, I think that they're necessary for most mergers to take place otherwise the new companies would have millions upon millions of shares. If the shell shareholders end up with 5% to 15% of the new company, it makes sense to reduce those number of shares, doesn't it?, especially since the new companies typically want an initial share price that allows at least some stockbrokers to solicit the stock. Pretty much all the private companies I have invested in (that merged) required the shell to adjust its share structure in some way or another. I don't have any favorite shells simply because I've always approached it from the private company side. I'm going to start tracking some now in order to learn a little more about strategies to buy in on the shell side. I'd like to find opportunities where there is a differential between the private placement price and what the shell is trading for. For example, a private company has a letter of intent to merge with a shell that is trading for a penny. The private company is doing a placement for $3 per share. The letter of intent is for a 100/1 reverse by the shell. I therefore know that I can buy into the future company at a discount up until the price of 3 cents. I thought I found one recently, but the market makers didn't let it trade and then the merger agreement fell through. So much for that strategy! I'm still learning. I'm thinking of trying to find out what shells are held by shell brokers. I'd at least know then which ones are being actively shopped around. I have a few contacts in that regard because of my investments on the private side. I'll let you know how it goes. Clo