Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Its funny how its all for one and not one for all...reminds me of Titanic where everyone is trying to climb into the boat, while the oarsmen, being the objectors to an EC, konk each other and everyone on the head... although there's plenty of room in the boat...I guess where Life, Limb, and High Finance are concerned, it's every man for themselves...PATHETIC
which twitter site
which twitter site
When a company wants to buy the shell, it will pay anywhere from $100,000 to $1,000,000 for the entity, with the price increasing if the shell is perceived to be an unusually clean one, with minimal likelihood of undocumented liabilities.
Once the acquiring company has bought the shell, the existing directors and CEO of the shell company will resign in favor of the new management team, and the shell will issue shares to the shareholders of the acquiring company in exchange for their old shares. The newly operational company will then file a Form 8K with the SEC to document these events, and then proceeds to issue all standard SEC reports from that point onward. The initial Form 8K will be a lengthy one, itemizing the acquisition agreement and following up with many of the same disclosures found in a Form 10K, but now describing the operations of the buying company, rather than those of the shell. Also, the Form 8K must include the separate audited and combined pro forma financial statements for both the shell and the buying company for the past two years, which requires some coordination between the auditors of both entities. The effort required to complete this initial Form 8K is so significant that the buying company should begin its preparation of the Form 8K at least one month before the scheduled acquisition date, since the form must be filed within four business days following the acquisition event.
At this point, the only stock that can be traded is the stock of the shell company that was tradable prior to the acquisition transaction. If the new management team wants to have other shares trade, then it can either advise shareholders to wait for Rule 144 to take effect in either six or twelve months, or it can engage in the sometimes lengthy and always expensive stock registration process.
There are several reasons why a company will buy a shell in order to go public. These reasons are most appealing to smaller firms with weaker balance sheets, and quite possibly with operational histories that would not allow them to bear up well under the public scrutiny of a traditional IPO. The reasons are:
1.Cost. Buying a shell can be quite inexpensive in comparison to the cost of an IPO, and is one of the main reasons why companies buy shells. If an entity simply does not have the cash to pay for an IPO, the initial cost of a shell can be quite attractive. Some shell sellers will even accept shares rather than cash in payment for their shell, thereby reducing the buyer’s out-of-pocket cost even further.
2.Timing. Buying a shell can be completed in a few weeks and requires minimal regulatory approval, whereas an IPO can drag on for many months, and involves the detailed review of filing documents by the SEC. For a company in a hurry to go public, buying a shell can be an excellent choice.
3.Acquisitions. The stock of a public company is considered to be more liquid than that of a private firm, which makes it a more viable currency for engaging in acquisitions. Thus, a company interested in multiple acquisitions may acquire a shell for this sole purpose.
4.IPO ineligibility. Many companies have such weak operating results, structural anomalies, or high risk levels that they cannot reasonably expect to have a traditional IPO succeed – the institutional investors that traditionally buy large blocks of stock through IPOs will have no interest in investing. For these companies, a shell acquisition is the only remaining path to going public.
5.Net operating loss carryforwards (NOLs). A shell may have built up a significant amount of NOLs that the buyer can use to offset its future taxable gains. However, upon a change of control such as the sale of the shell to the buyer, the amount of NOLs that can be used in each subsequent year is severely restricted; it is limited each year to a small percentage of the market value of the shell. Since a shell have a small market value (as evidenced by the purchase price paid for it by the buyer), the NOL available each year will be minimal.
Against these positive reasons to acquire a shell are arrayed several problems that can cause serious operational issues for the newly active public company. They are:
1.Residual liabilities. Shell companies are famous for having undisclosed liabilities that will haunt the newly merged firm, quite possibly sapping its cash reserves. Many major law firms refuse to assist a company with buying a shell for this single reason. The risk can be mitigated through an extensive legal review of a shell, but there is always the possibility that some liability has been overlooked.
2.Questionable trading activity. When the buyer acquires a shell, trading in the shell’s stock will be thin, and so is subject to wide swings in price. It is unfortunately common for stock manipulators to cause wild gyrations in the price, which keeps legitimate investors from investing in the stock. Also, the share price will initially be in the penny stock range, which also keeps many potential investors from buying the stock.
3.Funding. One of the main reasons why a company wants to go public is to raise money, which is integral to the IPO process. However, it is not integral to buying a shell company; in fact, a company is poorer after buying a shell, since it presumably paid cash to the holder(s) of the shell. Thus, fund raising requires a separate transaction besides purchasing the shell.
4.Reputation. Shell companies have a sometimes-deserved reputation for being on the seedier side of the public securities markets. A company going public by this avenue may inherit that reputation, which keeps a large part of the investment community from investing in the company.
5.Stock registration. In the absence of any exemptions, the acquirer of a shell company will likely register stock through a Form S-1. Any entity that has been a shell company during the past three years is not allowed to incorporate information by reference into the Form S-1 from its other SEC filings, which represents a considerable additional filing burden (and expense) for the company.
The preceding pros and cons generally steer larger firms away from buying a shell company. However, this may still be an attractive option for a smaller company with a higher risk profile, as long as it engages in extensive due diligence before acquiring the shell.
Now is probably one of the best times for a company to go public via a reverse merger. Shell prices are depressed so a company can purchase an OTCBB shells at steep discounts. The process is streamlined and allows a company that has already been audited to be public in thirty to sixty days. Once your company is public you will have a better chance of attracting capital from the equity markets. The valuation of a public company is usually three to four times that of a private company.
Does anyone know if preferred shares are available or do I have to go over to Stephanie St and find out?
Let me drink my Kool Aid and say I'm Dreamin of $1.50...Why Not? I mean, afterall, I've seen wilder things happen and my predictions are as good as anyone here..I mean I dont need no certified stinkin financials of a foreign company...I don't need no Certified Stinkin proof that a shot of anything will save me some mileage...I don't need no Certified Stinkin name of a Steel Company in who knows what country...All I know is I just bought 1 million shares at .0019 a little ways back and thats all i need to know! "Go Go S K G O" LOL
Fantastico...Appreciate your opinion...Yes it has become complex and more by the hour or day. I thought the Lehman NOL drama needed scrutiny because of the NOL importance to WMI. Thanks for the info
I guess it was just a coincidence that the rise in PPS coincided with the posted supposed email on Yahoo, then re-posted here, stating that a decision had been reached to buy back and decided on the previous night.
Replication of yesterdays email post
Shareholders!!!!
Thank you for investing in our company. The board met late last night, and I can confirm we have decided to buy back shares. The shareholders will be updated as soon as the proper paperwork has been filed with the SEC.
If this wasn't an attempt at price manipulation by the company [especially since they specifically mentioned in a previous PR that they wanted to address the difficulty they were having in acquisitions due to low PPS] or some self serving soul, I dont know what is
Being a shareholder I want honest growth based on company action and attributes and proof not words and manipulation...Not PR's comprised on INTENTIONS...See too many PR's from companies stating intentions to sell stock
Posted the question twice before to the WAMUQ blog site, not directed towards you. Posted in reply third time to you because you were on NOL topic and my research has not produced an adequate answer to my own question. Will WMI have to report NOL's so as not to lose tax breaks as Lehman has and as a result will the Judge suspend trading before a possible settlement? I apologize for not making that clear in the original post
Thanks for your opinion...Live Long and Prosper
2X no post back to question, maybe third time a charm from someone who knows NOL topic?
If/When WMI wins the rights to NOL's will WMI reporting the NOLs restrict future trading in our shares so WMI won't forfeit the tax benefits as LEHMAN has stated? Could this apply to us and would we be prevented from selling our shares?
Recent action by LEHMAN
Lehman has accumulated $48 billion in net operating losses, or NOLs, which it aims to use to offset taxes on an eventual sale of its assets to benefit creditors, according to a U.S. Bankruptcy Court filing.
Lehman so far has raised $17.2 billion in cash and intends to recover $40 billion to $50 billion in the next five years by selling real estate and other assets, Chief Executive Officer Bryan Marsal said in an interview last week.
U.S. tax law allows bankrupt companies to use accumulated losses to offset taxable gains on such sales as long as the corporate ownership doesn’t change, Lehman said in yesterday’s filing.
The defunct investment bank’s NOLs have more than quadrupled since it filed for bankruptcy in September 2008 with $613 billion in debt. Lehman said in bankruptcy court the next month its net operating losses were “in excess of $10 billion.”
Lehman reported the NOLs yesterday as part of a move to restrict future trading in its shares so it doesn’t forfeit the tax benefits. If the bankruptcy judge approves its request, investors would no longer be permitted to trade freely when Lehman starts to implement a reorganization plan or “other court-approved transfer of assets,” it said in the filing.
Docket #2173 Date Filed Jan 15, 2010
Here's one, Good Night
Go back over GHOST pdf's for last 30 days, you'll find Partial Removals listed there
wrong again what? These partial removals of rule 2004 have come in for the aformentioned parties also, and where does it say
they have "agreed to provide the requested information, thus they no longer need to be compelled to by the judge. Thus, it is one less item on that particular hearing that needs enforcing. This is good" in the partial removal of Rule 2004 for OCC?
They have come to some sort of agreement on partial withdrawal of Rule 2004 with Dept of Treasury, FDIC Board of governors, Henry Paulson, and Moody's also...I agree, I'd go for the jugular too...but if a deal like the 180 billion from FED to AIG through JPM can get covered over and declared a possible National Security issue by the SEC looking to save "little Timmy's" Ass, I expect weak hands here... this shouldnt surprise anyone nor should the objections to motions...this is the Government we're talking about here
Any estimate on the A/S after the share buyback completion?
Didnt say anything did or didnt...just a guideline, make your own conclusions...its only money
post #24384
Sticks and Stones
Education is part of the game..
Following is just a guideline for Signs of Dilution
In at .0079, As a shareholder I'm making my own conclusions
1. Gagged Transfer Agent (TA).
2. Inability to get a current share count from the company.
3. Increasing Outstanding/Authorized share counts.
4. Constant decline in price with rapidly increasing volume on chart.
5. Decline in price with no material event as a cause.
6. Large, even blocks of shares continually hitting the bid.
7. A history of Reverse Splits after running the share price into the ground.
8. The opening of a 504 Reg. D program.
9. Convertible debenture programs disclosed in financials or company communication.
10. Heavy coverage by penny stock promoters, mindless pumping on message boards, spam emails.
11. History of pump and dump action on the chart. 1-3 day quick runs followed by steep high volume drops.
12. Blaming low price and decrease in price on Shorting and Market Makers (MM's).
No trouble whatsoever..just placed an order for P's on scottrade
and go up again
As a pre-seizure shareholder and post seizure vulture, as Starke would believe, I want my money back and I'll take a little revenge with my tea, please....I have my fingers crossed and hope it isnt business as usual... An appropriate analogy would be it's the 4th quarter with 1 second on the clock, ahead by 2 pts, with the opposing team at the 50 yard line needing a miracle to put them in field goal range...the question is which ref do they have in their pocket
What year is this? 1929 LOL
As a shareholder I thought it only fair to add my 2 cents of wisdom since for the last few weeks I've had to listen to, and put up with, all the pipedream predictions and great DD here...
What goes up must come down...LOL
I didnt see a reply to one of my recent posts and was wondering if someone with knowledge of the NOL's would be kind enough to elaborate
If/When WMI wins the rights to NOL's would WMI reporting the NOLs restrict future trading in our shares as to prevent WMI from forfeiting the tax benefits as LEHMAN has stated could happen in their BK? Does this apply?
Recent action by LEHMAN
Lehman has accumulated $48 billion in net operating losses, or NOLs, which it aims to use to offset taxes on an eventual sale of its assets to benefit creditors, according to a U.S. Bankruptcy Court filing.
Lehman so far has raised $17.2 billion in cash and intends to recover $40 billion to $50 billion in the next five years by selling real estate and other assets, Chief Executive Officer Bryan Marsal said in an interview last week.
U.S. tax law allows bankrupt companies to use accumulated losses to offset taxable gains on such sales as long as the corporate ownership doesn’t change, Lehman said in yesterday’s filing.
The defunct investment bank’s NOLs have more than quadrupled since it filed for bankruptcy in September 2008 with $613 billion in debt. Lehman said in bankruptcy court the next month its net operating losses were “in excess of $10 billion.”
Lehman reported the NOLs yesterday as part of a move to restrict future trading in its shares so it doesn’t forfeit the tax benefits. If the bankruptcy judge approves its request, investors would no longer be permitted to trade freely when Lehman starts to implement a reorganization plan or “other court-approved transfer of assets,” it said in the filing.
Agreed...I'm partial to anything in LAYMANS TERMS, take the Constitution as example...nothing could be more self explanatory -PLAIN AND SIMPLE
Black Horse Capitol Management wants the EC disbanded to the limited extent that the EC membership is reconstituted with Preferred Holders stating as the Debtors argue in the disbandment motion that WMI common shareholders have virtually no prospect of recovery WTF..We'll see about that
http://www.kccllc.net/documents/0812229/0812229100121000000000002.pdf
Keep your friends close, and your enemies even closer..
http://www.ghostofwamu.com/documents/08-12229/08-12229-2194.pdf
We need this EC to keep a close eye on not only WMI but also the OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF WASHINGTON MUTUAL, INC., ET AL. IN SUPPORT OF DISBANDING THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS...No one is to be trusted..They claim to adequately represent equity but emphasize unless there is a full recovery for unsecured creditors, any recovery by equity holders would be a gift to which they would not be entitled. [In re Williams Communications Group, Inc]They also claim the Debtors employ at least 19 professional firms including attorneys, financial advisors, restructuring and turnaround professionals, consultants, accountants, and investment bankers, all of which jumped on the easy money tree band wagon and that an EC would greatly depreciate the pot of gold. Well I say if they represent our interests and care for us as much as they infer, I recommend they all take pay cuts or shares as compensation. The only representation I'll trust is an Equity Committee of actual shareholders...and even with that the "CAVEAT" lingers
If/When WMI wins the rights to NOL's will WMI reporting the NOLs restrict future trading in our shares so WMI won't forfeit the tax benefits as LEHMAN has stated? Does this apply?
Recent action by LEHMAN
Lehman has accumulated $48 billion in net operating losses, or NOLs, which it aims to use to offset taxes on an eventual sale of its assets to benefit creditors, according to a U.S. Bankruptcy Court filing.
Lehman so far has raised $17.2 billion in cash and intends to recover $40 billion to $50 billion in the next five years by selling real estate and other assets, Chief Executive Officer Bryan Marsal said in an interview last week.
U.S. tax law allows bankrupt companies to use accumulated losses to offset taxable gains on such sales as long as the corporate ownership doesn’t change, Lehman said in yesterday’s filing.
The defunct investment bank’s NOLs have more than quadrupled since it filed for bankruptcy in September 2008 with $613 billion in debt. Lehman said in bankruptcy court the next month its net operating losses were “in excess of $10 billion.”
Lehman reported the NOLs yesterday as part of a move to restrict future trading in its shares so it doesn’t forfeit the tax benefits. If the bankruptcy judge approves its request, investors would no longer be permitted to trade freely when Lehman starts to implement a reorganization plan or “other court-approved transfer of assets,” it said in the filing.
So interpretation of announcement means merger and signing will be finalized and announced between Jan 25th to Feb 13th?
Not to bust anybody’s bubble, Committees have also been synonymous with cover-up and can be utilized to certain advantage of special interests
1. What caused the Financial Crisis Committee
2. Special Scientific Committee for Global Warming
3. Special Committee to Investigate Whitewater Development Corporation and Related Matters
4. Select Committee on POW/MIA Affairs
5. JFK
ECT
Now we have the Congressional subcommittee for investigating the Federal Deposit Insurance Corp.’s role in seizure of WAMU
Answer by EC to Motion filed by WMI to ban EC due tomorrow. Will be interesting to see insight to the road EC plans on taking
Where did you find that? Did you call Secretary of State TX?
Pink Sheets List 5B A/S , 1,358,759,973 O/S 354,827,453 Float
Sorry guys...I meant to buy 25000 shares of a certain BK Bank Stock at .158, did not double check my buy page and they gave me 25000 at .0012 of BEDA...WHEW!!!Didnt mean to uptick your stock, LOL... Could you imagine if they filled my order at .158..where do i send the Thank You Note
Whats up with WMI and partial removal of Rule 2004 on the Dept of Treasury and FDIC...Crush these ladies and gents, what reason do they have to let up? Gotta love the reserve of rights with S & P, Wells Fargo and SEC
I agree, they still have that tone
I would imagine it would have to be or has been unless the EC still has not been officially recognized by the Court and has to request documents until then????Anyone know???