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If the company was diluting it would have done so the other day when we sat at 3-4. 130 million shares and the bid is still 2. Looks like news is on the way imo.
The trading is very strange. Possibly MM getting things in order before PR. I hope.
Normally when one gets a commercial loan the bank gets the orination fee when the loan is closed, not funded. The question I have is was that fee already paid. If so the first quarter financials will be way better than anyone can imagine. Maybe just wishful thinking but the loan is reported as closed on their website.
Thats the reason I like this stock, no fluff pr's plus the insiders own 25% of the shares.
If it only takes until June that would be great. I'm here for the long haul, I see huge upside potential. I'm not here to make 25% on a penny stock.
3% upfront fee is 19 mil plus 6 mil the first year in net interest income is 25 mil so maybe we are values at 3c instear of 4c. This does not take into account the business already closed or any future business for the remaining 9 months of fiscal 08. Also does not take into account buyback, which I personally am not counting on (that would be a huge plus). My numbers are probably wrong, but I tend to err on the low side.
Even if they are holding them they would still make the the upfront fee plus hold the spread on 671 million. If the spread is 1% thats 6.7 million net interest income to them per year. Only thing we don't know is if they still made the 5% commitment fee or it was something less.
Once the 600 million plus loan funds (no reason to think it won't), net income for year would be approx 30 mil (assuming no other loan closings. With 7 bil shares, net per share is .004 times a 10 pe is 4c per share.
The flaw in that thinking is that the company buying the real estate is getting a BCLOC loan which has monies set aside for debt servive if cash flow doesn't warrant. Therefore, they do not need to raise money for debt service. Any monies reaised should go toward acquisitions, thus producing more revenues plus hopefully capital gains.With the depressed real estate market now is a great time to be purchasing properties.
Heres my take on this. Would appreciate any thoughts. MERL changed its name to RELM. It is still basically MERL with a name change. The buyout of relm Real Estate by RELM was done so RELM Real Estate could trade publicly. This allows the real estate entity to obtain funds for its LLCs.
Not very many sub-penny or penny stocks have insiders who own such a high percentage of the total outstanding.
While sorting out how all these companies are interrelated is something management can only tell us; one thing is for sure. With the share structures of each, there are some deep pockets behind all the entities.
This does not look like dilution imo. When the company diluted shares it was on heavy volume with decreasing share price. It appears our share price has stablized. Any comments would be appreciated pro or con
I agree at some point a r/s merger may occur. However, uplisting to the nasd is a long way off. The prerequisites to listing on that exchange is share price and market cap not share structure. I believe msft has approx 10 billion shares (not to say this is microsoft). My point is this can run a long way without a buyback. I do, however, believe Carol when she says a buyback will be in the works. I just do not see proof that one is occurring now on the open market. However, I believe a company can buy large blocks without using the open market. If this occurs neither myself or anyone else would know until its pr'd.
I don't understand why everyone thinks the o/s must decrease dramatically for this stock to take off. The company has already stated positive earnings for first quarter, so it has a true source of valuation. Should the 600 million plus loan be funded net income should be in excess of $30 million. Not including any income for the remaining 7 months of fiscal 08, that would amount to .004 cents per share. A conservative pe of 10 gives this stock a valuation of 4 cents without a buyback. We don't need buyback news (although it would be great), all we need is news that loans have been funded.
and no sellers at 3. MM make money on volume. Just seems odd.
This trading is very odd. MM not UT to three on bid makes no sense unless something is about to happen (good or bad) I'm betting good.
I agree it wouldn't make much sense, just trying to play devils advocate. There is a reason that the property has not yet settled(as per relms site) and the loan has yet to be funded. I am long and strong on hcpc and am not planning on selling until at least .03 (unless I see more dilution). I just want to explore any possilities that may exist that might make my dd wrong. Too many people pump and too many people bash. I believe the truth lies somewhere in between.
If you never has a 25 bagger you probaly shouldn't play penny stocks.
Pennsylvania
Also just wanted to get peoples opinion on how the loan is closed but not yet funded. My thought is that in order for the company to have settlement on the property they still need to close the 175,000,000 loan Once that loan settles our $600,000,000 plus loan will be funded. Therefore, there is still a chance this deal doesn't happen (which is why its not pr'd and the share pice isn't at least 2 cents). Not bashing just wanted opinions on how this works.
Keep in mind that they must pay interest on the preferred shares so the spread on the in house loans is probably only 1%. Still a good chunk of change when talking about sub pennies. ($7,000,000 gross for the year)
Don't get hung up on the dilution. They can only dilute to 10 billion shares which is less than 3 billion more. Even at that with the revenue on the loan closings; I'll use 2% since the company said they wouldn't get 5% for the first closing: they will generate $13. 5 million in the first five months of fiscal 2008. Expenses for the year should be approx $1 million. Assuming no more closings (highly unlikely) and no income from the loans held in house (also unlikely) net income per share is .00125 x a conservative pe of 8 equals a penny a share. All these numbers are ultra conservative and assume no buyback. This stock is way undervalued.
Imagine the possibilies with money from an outside lending source and/or a buyback of even half the shares.
The audit would be an internal accounting audit, not an IRS audit. That being said I think we should look at the merits of what has happened or is happening with HCPC; not all this other speculation. We do know 11 mil in closings so the program works. We do know that preferred stock totalling $1 billion is being issued to support holding loans in house( lets assume thats the only money they lend out).And assuming the company only gets 2% upfront and works on a 1% spread, gross income for year would be $30 million less 1 mil operating expenses is $29 mil net. 29 mil divided by 7 bil shares(assuming no buyback) equals .0041 per share. If we trade at a multiple of only 3x earnings stock is worth over a penny. This could be the most undervalued stock on the market.
Thanks. I forgot about the a/s being 10 billion. So long as company doesn't do a r/s then increase a/s we are in great shape. According to her letter there are no plans for that. Assuming, we're working on a 1% spread this billion dolars brings income of 10 million per year (not including any loan origination fees.
New to the board. I have a question about the preferred stock. It states that all preferred stock will be converted into common shares at the price for previous 30 days within one year. Assuming todays price of .0003 that would convert to apprx 3 trillion shares of common. I own the stock and am not bashing. I am just asking if this is everyoneelses take on the preferred. I do understand that we would have a billion dollar asset for those shares but am worried about the share structure.