Improving Liquidity Interpretation
My financial background is elementary. I take a big-picture look at the scenery. There are things I see, however, that I like in the liquidity situation. One, it's not been liquid. For my interests, as a small retail investor, that has been a huge strength. I've seen resistance from the market, suggesting that low volume stocks are a weakness. But as a contrarian, most of these statements always prove to be false from my experiences. Hence, one of hundreds of reasons for my contrarian style to investing. Which also happens to be Zac's modus operandi, just for the record.
These guys that are heavily invested in the company can't get out without me noticing. And they won't get out without me profiting. The stock is liquid enough for me, every day this month, to walk away with $10,000 in profits easily. I can meet the buyer at the bid and get an instant execution. Maybe a two-day exit on some days, 3 at the most?
This month, for the first time, we have some decent liquidity. Over a thousand shares trading a day is a nice change, especially at a high price. Virtually every day, the bid is higher than the ask by a significant amount. Maybe 3,000 on the bid and 1,000 on the ask, for example. That is definitely more demand than supply. There has been firm interest at $1.00 from a buyer(s) on this stock.
Suddenly, there is much more supply available than before. I suspect the company is raising money at a $1.00 and/or convertibles are taking some profit. Just a suspicion is all. I don't know where else the sellers would be coming from at this point.
I predict that this is just the beginning of a snowball in the making. Next year at this time, I expect to see 100,000 share trading daily, a very liquid company as the company grows and convertibles find a price that matches demand.
The promissory convertible in December seems very dilutive, but it's a vested interest nonetheless. Littman and Zach have a lot at stake here at this price. It's a cheap and fast way to get capital for a startup and seems pretty popular as of late.
Some recaps:
"In March 2016, the Company issued 960,000 restricted common shares for $150,000 with option to acquire up to 1,920,000 shares
for $300,000."
Now, that's a sweet deal. I would love to pay $300,000 right now, which I'm sure I could get on loan, if I could turn around and sell it for $1.00 at today's current price. But that can't happen. Not with those convertibles ahead of him, me in front, and demand not there to be met. I will know when 1 million shares were ever able to be sold, and that's never been the case, nowhere close, since this went public.
"In April 2016, the Company issued 200,000 restricted common shares to Uptick Capital for fundraising assistance."
I really don't know anything about Uptick Capital. I can see them on Google, but they say a lot yet say nothing that is of value to me. What I CAN see is that they can't get paid until April of next year, and they need to be concerned about this company so they can get paid. And I need to paid, at least the majority of my stake, because I don't want my chips on the table when everybody else is paid. And he won't be selling 200,000 shares at this illiquid price (liquid for me, not for them).
"In April 2016, the Company issued 75,000 restricted common shares to Odeon Capital Group and 75,000 restricted common
shares to related party."
And I will trust by their CNBC appearances that these guys are here to sell 150,000 shares which are restricted until April of next year due to the 1933 Act, one of the best decades of the best of regulations.
"In April 2016, the Company issued 714,286 restricted common shares for $250,000."
Oh, man, that is such a lot of shares. Just stack them on and on, and they can't get there without going through me. How are you going to do it with just 3,000 shares on the bid?
"In April 2016, the Company acquired all of the assets of Revolutionary Software, LLC for $300,000 cash and 2,320,000 restricted common shares."
Jennifer is really smart. I know her husband is too because that's how it works. Smart likes smart; money likes money. They have $2 million right now that they can't even tap into until next year. And if they could right now, they just wouldn't be able to.
So, I am every confident that this stock is going to be very liquid next year. One, too much vested interests at stake for it not to be. Two, the growth is real and the partners are real. MJ and BIOtrack are strong endorsements. They wouldn't do business with just anybody. Now, they can continue trading 3,000 shares a day for a few decades also. That's fine with me also. I'd actually prefer that situation, though I feel confident I won't see that. I will just know when it's possible for an exit, and as long as it's not possible, I know my back is covered. When my interests are not in alignment, that's when I need to start watching my back.
I remember one restaurant stock back in the '90s, A familiar brand name, and I can't remember what it was. It traded on today's volume and actually paid a little dividend. Insider ownership was heavy, and they paid themselves plus shareholders that way. Never did trade heavily, and with a dividend, I'd love that too.
I have a lot of confidence in this show. One year ago today, I had nothing to say. There was not even a HLIX. One year into the future, I'm expecting a lot of interesting things between now and then.
