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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: The_Bomb who wrote (9462)	3/2/1999 2:30:00 PM
From: John J H Kim	Respond to of 43080

I hope not. Bagel dough is a bitch to clean.

To: The_Bomb who wrote (9462)	3/2/1999 2:44:00 PM
From: Jay Lyons	Read Replies (2) \| Respond to of 43080

AOL/QNTM Out with black and blue marks. Yo, Bomb, I notice that this is your first post on SI. I sincerely hope that you didn't buy into BIGC a few days ago when it got pumped. If so, you might want to consider the ethics of asking others to join you in a stock that is currently off 60% from it's high a few days ago, and could easily return to it's base at twenty-five cents. 08-Feb-99 15:00 -- 16:00 ET BIG CITY BAGELS (BIGC) 31/32 +17/32How do you go public without having to involve investment bankers, preselling stock by subscription, and filing extensive registration statements with the SEC? You do a reverse merger. These are becoming ever more popular as the "back door" to the public market. The deals usually involve a struggling, or even bankrupt public company, and an internet or technology company that wants to be public. The public company "merges" with the private company, but the private company takes over. The name is changed to the private company, the symbol is changed, and voila! there is a new public company. What's in it for both companies? Shareholders of the failed public company suddenly have shares in a public internet company, which they can sell immediately. The private company becomes public, which allows the stockholders to make their holdings liquid. There are two major problems with reverse mergers, however: 1) there are no pre-filing registrations statements for the private company, so you don't have a chance, in advance, to review the financials of the private, acquired company; 2) the acquired company often receives little influx of capital, which they would have in a public offering. In some reverse mergers, for example, Imaginon (IMON), part of the deal included the public company selling preferred stock (at $1 a share) to investors who could convert it to common on the merger. The private company then got the proceeds from this sale, and the preferred holders could instantly convert to common and sell the stock, after a press release pushed it to more than $10. So, today's announcement, cleverly titled "Big City Bagels Makes Announcement," that failed BIGC will be merging with VillageNet and Intelligent Computer Systems, should be viewed with extreme caution. The first question that should be asked is "Why do VillageNet and ICS need to do a reverese merger to become public? Wouldn't they prefer to receive the proceeds from an initial public offering?" You would think so, given how much can be raised by internet companies currently. Although the announcement states that VillageNet and ICS had combined revenues of $7 million, with net income of $570,000, no details are provided. The revenue and profitability sound good, but where did they come from? An investor in the stock should know far more than is provided, but you won't know much until the merger happens. Of course, the BIGC shareholders' hope is that it becomes, as a result of a press release prominently featuring the word internet in the headline, a huge one day runup, after the daytraders make a play at it. Good luck with your investment Jay