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Sheffield Pharmaceuticals (fka SFFPQ)

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Sheffield Pharmaceuticals (fka SFFPQ)

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beigledog Grandfathered
09/09/05 11:49 AM
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I just found this stock yesterday when I got an email about it. It **was** the perfect arbitrage opportunity, until I found out that the record date was August 30th. Here's how it goes... The company announced yesterday (9/8/05) in a 14C that they were doing a 1:250 reverse split. The filing also said that every shareholder that held fractional shares after the reverse merger would be rounded up to the third whole integer (100 shares). The stock is currently trading at .005 x .08. So what this means is that if a shareholder bought 1 share today (pre-split) after the split it would be worth 1/250 of a share. BUT...because they round to the third integer they would own 100 shares (post-split). That means that you would get the equivalent of 25,000 shares while only paying for one. You buy the one share today (at .08) and sell your 100 post-split shares for $125 (if the bid/ask stayed the same as currently). The only problem is...the record date!!
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