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LIWA inching up under the radar.
Amazing fundamentals. Just doing it's thing inching up 1-3% every day like it's no one's business.
The conversion ratio is 2:1, or $8:4.
Is the market conversion price the same as the conversion ratio? Those articles did it differently.
I'll figure it out and I won't be sharing it with anyone here. Haha.
Glad to have you aboard, Rainmaker. A lot of good insights with those articles.
Okay. I'm in.
Now, you going to tell me what its market cap. is? Please.
Can't seem to find it anywhere.
Is that your final answer? $4?
And that was an amazing turn of events. A few days ago the company was on life-support, gathering pawnshop-type loans to stay afloat. Now, it's backed by a billionaire with and written about in Forbes.
I'm just figuring out when the next good entry point is.
Thanks. Looks like a breakout in the making.
But what is the market cap. of the company?
Come on people, I know it's early in the morning but if we can figure out what price Mr. Frost makes a profit at after he converts his preferred shares to common shares, we can go all-in and make good money here.
I know there's a lot brain power on this board. Let's put it to good use.
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Determining the Profit of Converting
The conversion ratio represents the number of common shares shareholders may receive for every convertible preferred share. The conversion ratio is set by management prior to issue, typically with guidance from an investment bank. For Acme, let's say the conversion ratio is 6.5, which allows investors to trade in the preferred shares for 6.5 shares of Acme stock.
The conversion ratio shows what price the common stock needs to be trading at in order for the shareholder of the preferred shares to make money on the conversion. This price, known as the conversion price, is equal to the purchase price of the preferred share, divided by the conversion ratio. So for Acme, the market conversion price is $15.38 ($100/6.5).
In other words, Acme common shares need to be trading above $15.38 for investors to gain from a conversion. If the shares do convert and drop below $15.38, the investors will suffer a capital loss on their $100-per-share investment. If common shares finish at $10, for instance, then convertible preferred shareholders' receive only $65 ($10 x 6.5) worth of common share in exchange for their $100 preferred shares. (The $100 represents the parity value of the preferred shares.)
SEE: Analyze Investments Quickly With Ratios
The Conversion Premium
Convertible preferred shares can be sold on the secondary market, and the market price and behavior is determined by the conversion premium, the difference between the parity value and the value of the preferred shares if the shares were converted. As we show above, the value of the converted preferred share is equal to the market price of common shares multiplied by the conversion ratio. Let's say Acme's stock currently trades at $12, which means the value of the preferred shares is $78 ($12 x 6.5). As you can see, this is well below the parity value. So, if Acme's stock is trading at $12, the conversion premium is 22% [($100 - $78)/100].
Read more: http://www.investopedia.com/articles/stocks/05/052705.asp#ixzz2JT9mFfHe
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An Example of Convertible Preferred Stock
Imagine you bought 100 shares of convertible preferred stock in XYZ bank. The preferred stock cost you $500 per share so your total investment is $50,000. This particular class of preferred stock pays $25 per share each year in dividends for a 5% dividend yield. It also has a special conversion privilege, which says that you can convert each share of preferred stock into 50 shares of common stock.
Think about that for a moment. Your preferred stock of $500 per share is paying you $25 per year in dividends, or a 5% yield. But you also get a lottery ticket that allows you to trade in your preferred stock and exchange it for 50 shares of common stock. That means your "cost" of converting to common is $10 per share ($500 preferred stock divided by 50 shares of common stock = $10 cost per share in the event of conversion).
If the common stock is less than $10, your convertible preferred rights aren't worth much. If the common stock is $10 or more, your conversion rights can be a goldmine. An illustration might help.
If you wake up and the common stock is $7, you wouldn't want to use your conversion privilege because you would exchange your 100 shares of preferred stock for 5,000 shares of common stock (since each share of preferred can be exchanged for 50 shares of common, or 100 preferred x 50 common = 5,000 common). That would leave you with 5,000 shares of common stock at $7 per share, or $35,000. That is a loss of $15,000, plus you wouldn't receive your preferred stock dividend, anymore!
Imagine, instead, the common stock skyrockets to $30 per share. You would take your 100 shares of preferred stock and convert them into 50 shares of common stock each for a total of 5,000 share of common stock. You could immediately sell your common stock for $150,000 because $30 per share market price x 5,000 shares = $150,000. Your cost was only $50,000 when you bought the convertible preferred, so you tripled your money and you collected dividends up until the time you exercised the conversion rights.
Thanks.
I haven't done this in awhile but is the market conversion price then? I'm assuming it's $8. If it is, then the way to play this would be to go all in at $8?
Can anyone confirm if the market conversion price is $8?
Does anyone know the conversion ratio for the preferred shares? Is it 2:1?
Also, keep an eye on when Mr. Frost decides to convert his preferred shares to common shares. It'll be an indication of things to come.
Thank-you.
What is its market cap. then? I can't seem find it anywhere.
If it's $646, instead of a night out on the town, I'll just buy the company. lol.
Obviously, every stock is different but in my experience here's how "follow the big money" play unfolds:
--the price will rarely fall below the private placement price.
--the stock usually trades in a narrow range a certain percentage above the private placement place for a long period. There may be an occasional pop but it usually falls back into that trading range.
--the stock will only run when the big money are well-positioned. When it does run, it's fast and furious.
Follow the big money plays are guaranteed cash but they require patience.
In other words, I haven't a clue what you should do since it's your money. But I what I'm doing.
According to Google Finance, GGCO has a market cap. of $646. I'm assuming that's inaccurate?
LOL. It's nice to have a sense of humor and enjoy what we do.
What's sexier would be a MSLP 6+ bagger.
Dow Jones, Nov. 15: 12,542
Dow Jones, Jan. 29: 13,954
We're in the midst of a bull market. Huge influx of money coming from the bond market. If MP can get its house in order in the next 3 months, we may be able to catch this wave and anything is possible.
lmao. While with one eye glancing sideways at Cory's amazing abs..
"This also does not explain one share for 8 bucks convertible to 2 shares instead of one share for $4."
The only reason I can think of is if MP declares a dividend per share and those preferred shares have not been converted to common shares. Their dividend payment would be 1/2 versus 1/1 if those preferred shares were convertible 1-1 to common.
Some very high-priced lawyers worked out the agreement, so I'll end my assumption here because it's way beyond my comprehension of the topic.
Preferred shares have priority over common shares. It's a way for Mr. Frost to minimize risk with his investment.
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Preferred stock (also called preferred shares, preference shares or simply preferreds) is an equity security with properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. Preferreds are senior (i.e. higher ranking) to common stock, but subordinate to bonds in terms of claim (or rights to their share of the assets of the company).[1]
Preferred stock usually carries no voting rights,[2] but may carry a dividend and may have priority over common stock in the payment of dividends and upon liquidation. Terms of the preferred stock are stated in a "Certificate of Designation".
Similar to bonds, preferred stocks are rated by the major credit-rating companies. The rating for preferreds is generally lower, since preferred dividends do not carry the same guarantees as interest payments from bonds and they are junior to all creditors.[3]
Preferred stock is a special class of shares which may have any combination of features not possessed by common stock. The following features are usually associated with preferred stock:[4]
Preference in dividends
Preference in assets, in the event of liquidation
Convertibility to common stock.
Callability, at the option of the corporation
Nonvoting
Whatever shares are unwanted by the invitees (Mr. Frost and his buddies) will be offered to the public.
That'd be nice. But some of these private placements are by invitation only and shares sold in units with a minimum investment requirement. In other words, it's a high stakes poker table and we're not invited.
If MSLP ever hits $4, go all-in.
Yesterday's announcement was a buy signal. The only buy signal more definitive than yesterday's would be a guy with a beard peeking his head through a cloud and yelling, "Buy MSLP! Buy MSLP!"
IMO, there is a 0 chance that Mr. Frost will let MP fail. The only concern is at what cost to current shareholders through dilution.
He's alive!
I had MSLP on my watchlist for several months and lurked during that time. I remember reading some of your posts.
Codie wrote awhile back that he saw you on a street corner, looking disheveled, with a cardboard sign that read, "Will trade MSLP shares for food."
I'm sure we'll be rewarded this year.
CBP looking good.
I prefer quietly inching up 1-5% a day, under the radar, for about 30 days. Then a 60% spike for the finale!
I hope you're right, DS. Many uncertainties have been removed with the Frost agreement. It was probably the first digestible PR we've had in months. Hope it gets put to good use.
Looks like the stock's experiencing a flat workout and could use a good helping of Combat, Amino 1, or Assault.
I averaged out at $5.95 post-split. I sold over 50% of my shares at $4.10 for a loss, but I sure slept better after doing it. My break-even for the entire MP fiasco is now around $8.
Assuming a $4 pps dilution, $17 pps would give a market cap of about $64 million, which is easily achievable if the company becomes CFP or profitable or Mr. Frost increases his investment significantly.
Lots of "ifs" with this play. Current management being the biggest one.
"If they only got $3.7 million...How do they pay in order of the first 2 items($4.5 million) let alone all 5 items!! That are worth $6.7 million plus???..Makes no sense listing all if only got $3.7 million."
This could probably be explained from two perspectives: MP management's and Mr. Frost's.
From MP management's perspective: They want to retain as much control as possible and not give too much of the company away to Mr. Frost. They're hoping the $3 million difference can be made up through operations or more dilution through the open market, if it comes to that.
From Mr. Frost's perspective: Karma. Mr. Frost is stringing MP along like MP has been stringing investors along for some time now. He wants to incrementally increase his investment with little or no risk. He and his buddies provided a $1 million bridge loan to give them a taste of what big money feels like, then another $3.7 million (not enough to cover the $6.7 million they needed). If MP needs more money, sugar daddy Frost will be waiting with not-so-nice terms the 3rd time around.
Anyone who thinks Mr. Frost ($2+ billion net worth) is out to make interest on a $1 million loan or a triple on $4 million is naive. He has his agenda.
In the end, it's all up to MP management. If the company becomes profitable and self-sustaining, then it won't need an overseer.
Avocet sounds like a big happy waha!
Higher interest rate could be bad if it's already too high. But it's not right now.
When interest rate goes up, bond price goes down. In turn, bondholders switch to stocks to seek higher returns. This has been the trend since the beginning of 2013. The DJIA has gone from about 13,000 to 13,880 in 30 days. This is not my theory but what is actually happening and is expected to continue in the next several months.
Just saying, now is the good time to be in stocks. But don't be the bagholder when the next crash or major correction comes, as it has every 4-5 years.
Hope CBP numbers are good. Legit Chicom breakouts are becoming more common.
Me neither. A company with $100 million in revenue, growing at 100% a year, in what is expected to be the world's largest economy soon, with 1.3 billion people to feed...IF everything is legit, this is easily a $10 stock in 2-4 years, IMO. Lots of "ifs" at this point though.
Sentiment: Accumulate.
We're either holding the stock of the year or the next LPH.
Negatives:
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--pending dilution to support operations.
--behind schedule with product releases.
--lost about $16 million in last filing. They didn't have $16 million to begin with so most of that might have been accounting loss--using shares to pay athlete endorsers and booking them as an expense as one example.
--expect losses to continue.
Positives:
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--tier 1 athlete endorsers.
--clinical trials for Drop Technology coming along nicely.
--management has done everything they said they would, albeit late.
--expect a rash of distribution deals in the coming months.
--strong pps support at $.16.
I'm sure there are many others in each category.
CBP the next Chicom breakout?
I've been in CBP for about 3 months. Legitimate Chicoms have been inching up or breaking out. IMO, CBP may be next to run.
Tiger is on the 2nd year of a 5 year contract. So it's unlikely he'll jump ship anytime soon, unless something drastic and unforeseen develops.
Groupon and Dex One weren't going anywhere until major two hedge funds announced they had taken major positions in the companies. Both stocks increased 100%+ in less than 1 month.
It wouldn't surprise me to see the same thing happen to MP, IMO.
The general consensus at the moment is that huge amounts of money will enter the stock market from the bond market because interest rate is expected to go up and bond price to go down.
Not a good time to be holding dead money in the next several months.
IMO, your pre-split $0.02 entry point may still be good if the company becomes CFP or profitable or Mr. Frost decides to increase his investment.
My only concerns are how long it will take and are there better opportunities available?
One thing I've learned with MP is never to play "what if" scenarios because they're all over the place with their PRs and SEC filings.
Agree. Any trader looking at MP as a turnaround play, today's announcement was a definitive buy signal. I wish I had been a bit more patient with my entry point.
Long-term, I'm not too enthusiastic about the supplement industry. There's no barrier to entry.
IMO, the actual CLOSING (not fluff PR, amended SEC filing) of the placement does clear up uncertainty about the company's future for the next 6-12 months. Now, they have some money to continue operations.
Due to its checkered background of dubious (some would say fraudulent if taken collectively) announcements , management should issue press release only when an agreement is legally binding, like the one today.
I'm sure Mr. Frost and his team stipulated certain conditions on how the company should operate going forward before they signed the deal. IMO, $4-$5 is a sensible entry point for a 9 month time frame.
There's still a long ways to go but today's agreement is a good start.