To: Leroyt who wrote (6788 ) 1/7/1999 9:11:00 AM From: otcbbbaby Read Replies (4) | Respond to
Leroyt:
Things could be worse. They could be quoting the price in Euros.
I can give you my ideas on it, for whatever that's worth. Someone posted about employees and I think that's a sound thought. Bonuses traditionally come out around Christmas and, if the bonus is in shares, the stock is restricted for one year. Its possible that many employees are selling last year's stock because they received more this year.
Another thought is that the company may have done a private placement using 504 shares. If that's the case there has to be a filing with the SEC's office in Maryland somewhere and it will have to show up in the next few weeks. Even though a 504 is listed in Regulation D as a private offering its actually considered a public transaction -- don't ask me why because I don't know -- and so the shares are free trading. With a penny stock a 504 would have to include a discount of some kind. Probably 20% off the bid. The maximum amount a company can raise under a 504 is a million dollars.
What has been known to occur is that the group doing a 504 is connected to MM's somewhere who magically drop the bid before the transaction date, thereby cheating the company a bit on price. Those same people then arbitrage their investment by selling some shares into the market to protect themselves.
If the company raised a million dollars at, say, a price of 21 cents, then the company just issued six million shares after the discount.
If we all suddenly receive our shares that might be an indication. lol
The company doesn't do things on a whim, in my opinion anyway. If they raised the money they needed it for something. Hopefully its for marketing. January, February and March are the critical months. If PMA doesn't sell the game may be seriously delayed or finished. Let us hope that if they did a 504 it was for that reason.
Other money needs might be the depositions coming up or a version 2 production costs. The last time I was there they told me that they eventually want an online update capacity but that such a process could cost hundreds of thousands to set up.
I also think some MM's are running scared, especially if they go to CompUSA stores. I do believe that MM's will play their games more than usual because the clock is now ticking on their method of making a living. Once companies start reporting its all over for them. So I think the intensity of the process will increase between now and July. Maybe yesterday was tied to that, but my money is on a 504.
That's my one-tenth of a share's price worth.
later
