Dormant Shells

[CSykes]

No, not the holding period.. but Rule 144 eligibility.

In layman's terms, under the new Rule 144(i)..

Any company that has ever been a "shell" or was once a reporting company under the Securities Act of 1934, must become reporting as a Securities Act company if a merger or change of business has been conducted in order to be eligible for Rule 144.

Example..

ABCD is a pinksheet "shell", that was once a reporting company. ABCD conducts a R/M with "AMCE Junk". At the close of the merger.. all post merger shares shall be ineligible under Rule 144 until the post merger company registers with the SEC.

That means, any post merger shares are 100% illiquid and can never be "free trading" until registered with the SEC.

An example of this rule being broken and the consequence of it can be seen here...

http://investorshub.advfn.com/boards/board.aspx?board_id=16132