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Re: TOP1 post# 29597

Sunday, 12/14/2014 1:16:42 AM

Sunday, December 14, 2014 1:16:42 AM

Post# of 29739
Its not related it is it's own entity that they may or may not own shares in. They invested a small sum in something that was very much undervalued and because it was never NWMT equity it gives them the rights to do as they wish by reselling the aquired equity on the open market were they purchased it.

Now an asset has to known values one market value the equity on the open market and the other being the street value of the asset let me give you an example. You have a new cap you purchased for twenty thousand but being you purchased the cap first being it holds trinsic value " street value" the car on the street is worth twenty thousand.

The licence to operate the cap is yet to be purchased it is what you call intrinsic value so you have no revenue that makes the cabs market value zero plus market value minus depreciation even thow the car has not moved or done one trip and could be still sitting on the sales mens lot at the dealers.

So investors price the asset way under value due too depreciation. Now comes the interesting part you take the car you paid cash on leverage it for additional funds giving title of the cab to the bank for collateral because you have not a dime of revenue as of yet so the company ends up with twice as much debt as assets due to the leverage and the money being spent on a operational licence that is all so depreciated as the new date of renewal comes up and extra cost in getting your new companies name out there in the public.

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