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and zero volume for a very long time
i'll probably email the new pres and try to explain why its just a bad idea in general to be handling the share structure this way... not only for what it does to existing shareholders, but what its going to do to the company's reputation going forward, not to mention liquidity issues post RS.
well its probably ok to call the broker number. we can mention the market maker issues we suspect, and then ask them if they would really approve a reverse split which would leave only a few thousand shares in the tradable float..
might at least put the RS under scrutiny.
if its their job to oversee this process, they might reject it as inappropriate.
nah... marc's a nerdy jazz guy with no knowledge about this pinkie stuff... and he sure isn't posting here.
I still think he's a stand up guy in the industry.
but doing a deal on the pinksheets puts you in a different world
i'd bet my shares, what little they're worth now, on that..
can we complain to FINRA?
i guess his job is done
the RS news has crushed it
I suppose there is a small chance FINRA won't approve this crazy RS...
not that I would bet on it...
but I've been shooting in the dark on this one a lot more than I realized..
the transfer agent information is roughly 75m OS currently. people here have been checking it almost daily up to now
GLRP .28 to 1.48 today on nasdaq
its true, I've done OK on reverse merger RS scenarios where the reverse split was reasonable and made sense, like a 1 for 10, or 1 for 100 even..
a 1 for 1000 is only a scenario I've seen used when the OS and float are gigantic, or if they simply intend to wipe out all existing shareholders. and again that happens but usually there is some care taken not to put out exciting news and follow much later with the RS wipeout news after lots of volume has invested in the new business plan.
it doesn't make sense, and I didn't see it coming.
a 1 for 1000 probably made sense at .0006 price point before news, if only price and not share structure were being considered when these decisions were being made.
going from .0006 to .60 sounds reasonable.
but the problem is, news came out, without mention of an RS and it traded up like mad to much higher levels...
doing a 1 for 1000 at .01 or .05 or even .10 certainly doesn't look the same as doing a 1 for 1000 at .0006
so its a possibility we're dealing with someone inexperienced here.
true. I don't know. I know less and less about this deal as each day passes....
guess I better get some sleep...
you know I don't think its a merger. it looks to me more like they hired marc, and cut some deal for the catalogue... it might be a 'new company' but not a merger really. just a new business plan with the existing shell.
will be interesting to see if the catalogue deal is done again with another promissory note to hindsight like last time when it didn't work out apparently.
yep, probably just a nerdy jazz guy who loves music and knows everyone in the industry. his linked in profile sounded like he was looking for work, and maybe that's how they found him...
I hope for his sake he's looked into this pretty carefully and knows what he's doing. he sure has a ton of credibility in the music biz, which is what we all got excited about... but he was in the safe confines of a mega corporation with his career.. its a different world out there on the OTC.
well,
never a dull moment on pinksheets!
I'd be willing to bet that the new president knows next to nothing about what is happening with the share structure arrangements. he probably just landed a new job, and is excited about the catalogue. someone else has put the whole deal and share structure together. the new president probably has no clue how some pinksheet companies operate, given that he worked for a huge corporation for so many years.
don't post it. not a good idea when everyone is upset... stick to the phone or email...
don't do it. its not a good idea to try and meet with someone when you are really upset. just send an email or make a phone call. they've made that information publically available to shareholders in the last PR.
doubt it. the float is such a minority position in the overall share structure, doubt if its even an issue. but I suppose if someone wanted to spend the time to do some digging what I'd be most curious about is whether any market makers had advance notice of the upcoming RS and took the opportunity to short... that is the area that has me most curious, just watching the behavior of the MMs for several days now.
have you ever done a google search like this one? its pretty interesting reading...
http://www.google.com/search?output=&sitesearch=&hl=en&q=knight+securities+fined&submit=Search+the+Web
in the end, to be honest there is nothing technically wrong with the company doing a reverse split. companies are doing it legally pretty much every day.
its just that this one is very unusual, to be this large when the share structure isn't very big.
plus, its just not very nice the way it happened. with the PR a month ago, and all the excitement it generated with all of us investing in the company, and then wham... a 1 for 1000 RS to wipe out our positions... they didn't make any new friends.
nothing. when you reduce the float to a few thousand shares, then sell new shares into the open market, the voice of the previous shareholder is essentially meaningless.
amazingly, its legal to do this. there are many repeat offenders on the pinksheet market that do this over and over... in the end their only true business is selling shares, as every business model they try fails. Its not illegal to start a business and fail. But how you do it matters.
I do thousands of stock trades. I get letters from the justice department all the time that I've been a victim of a crime. They catch a ceo, or a someone at a pinksheet company who has been running his company improperly, particularly how they handle the selling of shares, and they put them in jail. And I get a letter. It usually takes a couple of years or more. And by the time I get the letter I can't always remember what company it was. Some company I lost money on, and either sold for a loss or is sitting worthless in my account.
But it happens all the time. I have stacks of letters from the justice department.
none of this would matter if they hadn't put a PR out about the great new company. why on earth do that, then a month later RS the shareholders to pretty much zero?
just do like everyone else. do your share structure changes quietly, form your new company and then put out your prs...
that's how its done if you have even a minimal concern for the shareholders who are interested in your company story.
if we get a little bit lucky sometimes these RS scenarios eventually squeeze, as some of the shorts are forced to cover.
no idea if that will happen, but it certainly might.
so I may just wait and see, or I'll just end up with 1,000 shares suitable for framing and hanging on the living room wall, maybe to glance at as I listen to some classic old big band count basie jazz on the phonograph and remember how much I paid for that track.
yes. this is nuts.
it could be 4,000. is that a stock market record? even if they fully dilute this before the RS, and dump 100 million shares into the float, it would only be maybe 100,000 to 110,000 shares in the float after the reverse split
it would have been more appropriate yes... why do I have the feeling marc probably doesn't know a lot about this aspect of the business? who do you suppose is handling it?
yes its pretty surprising to put out a PR exclaiming the new company and let a month pass before a big reverse split headline... they almost always put the RS information out at the same time as the new company info. even a lot of pinksheets with billions of shares don't handle it this way. and if you have 10 billion shares, and do a 1 for 1000 RS, and end up with 10 million shares, you can at least make the claim you are doing it for an 'orderly market'.
but there is nothing orderly about a few thousand shares in the float.
given this is a 1000 to 1 R/S, I can't really see any legitimate reason, honestly. They are shrinking the float and OS to nearly absolute zero. Having a zero float is exactly the opposite of what they said they wanted to do in the PR :
"to preserve an orderly market for its securities. "
of course its absolutely not going to do that. there will be a huge spread between the bid and ask, and volume will be next to zero because no one will be interested in trading it.
So it will in fact create a 'disorderly' market.
They have the means to do whatever they need to do structurally to the shares which are not in the public float. Cancel them if they like, or some significant portion of them. Companies do it all the time.
So with a float of lets guess, maybe 4,000 to 10,000 shares they expect to have an orderly market? I've never seen anything like this before. ever. And I've seen hundreds of reverse splits over the last decade. never one like this
and all the brokers who wouldn't allow trading in this turned out to be right as well... wonder if they knew about the upcoming FINRA R/S
yes. fair to say he tried to warn us about this possible outcome, and turned out to be exactly right...
75,000 OS post reverse split... probably the smallest share structure I've ever seen attempted on the stock market
well, guess I can paper my walls with my 1m shares.
oh wait.
1000 shares won't cover much..
a bit over a million shares traded at a pretty lofty price up near a dollar at times over a 3 month period, then wham, down to 4 cents with 2.7 million shares out of nowhere
the answer is in the volume history I expect:
look at the volume history and price history after april 11, 2008, the last reverse split.
volume was small, but somehow managed to increase as the price dropped from .75 to .80 to below a penny in 3 months.
http://www.otcmarkets.com/pink/quote/quote.jsp?symbol=ucso
shs decreased by 1 for 1600 split
Pay Date: Apr 11, 2008
10/31/08 0.0040 0.0050 0.0001 0.0006 -0.0024 989,838
09/30/08 0.0050 0.0120 0.0005 0.0030 -0.0020 1,940,112
08/29/08 0.0500 1.0100 0.0010 0.0050 -0.0360 8,619,310
07/31/08 0.5500 0.6000 0.0410 0.0410 -0.5590 2,778,083
06/30/08 0.7500 0.8300 0.2200 0.6000 -0.1310 251,598
05/30/08 0.5500 6.5530 0.5500 0.7310 +0.4810 560,766
UCSO open high low close change volume
04/16/08 0.2500 0.2500 0.2500 0.2500 -9.3500 321,821
the T trades after the bell for 2 days are starting to make a lot of sense now aren't they? holding buys till after the bell so the stock closes at a lower price, and continues to look weaker and weaker, as the short position kept growing...
or days ago. I've been watching the shorting on this for days...
and funny how it all seemed to be one market maker in particular. guess I should have realized there was a risk maybe I hadn't anticipated. but I would never have believed anyone would be crazy enough to do a 1 for 1000 RS on something with this small of a share structure...
I'm still shocked.
I've seen it plenty of times with stocks that have billions of shares outstanding...
but never anything close to this with such a small float and OS
guess there is always something new around the corner with the pinksheets...
amazing
its never smart to upset shareholders, you are depending on the shareholders to make a market for your shares so that the company has liquidity...
and if you don't have liquidity, what's the point in being public? might as well just be a private company.
why even put out a PR on Feb.1, if you're already planning to eliminate current public market shareholders with a 1000 for 1 RS?
really makes no sense.
all you do is bring in a lot of new shareholders that are going to be pretty upset a month later.
-72% 2.6 million sold for losses.... maybe that will be a bit of a learning experience to the new management about the market's view of the current plan