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I like your post #197812 and agree that they will come with something to force a cover this week. A RS will hurt insiders as well as us and they have to know that. Therefore, they must take out the short position before the RS. They do not want to attempt to get on Nasdaq with 1.5 billion naked air shares on their back.
ROB, good post. I don't have a problem with the RS, however, the purpose of it is to get us on Nasdaq without having 1.5 billion naked shares on our back. My only problem is that he should have continued with his original plan and made sure the short position was eliminated before announcing the RS. It is pretty well considered a fact that if we do a RS that the shorts will take the price down starting day one and they will put all their efforts into getting it as low as possible. We may still keep it high enough for enough days to get on nasdaq, but it will be at the expense of share price. Those who have held for over a year know this is a great company, but they held that long because of the assurance given by SM back in November that he had a plan to get rid of the shorts and would accomplish that in 60 days. OK it has taken a lot longer, but to do a RS when we are on the cusp of a covering and short squeeze to me is bad judgement that may cost a lot of good shareholders a lot of money. Plus, the shorts are still here. Get rid of the shorts and give us a squeeze before the RS, and I am a happy camper.
Sorry, I didn't know about them. Was it $4 million dollars worth of shares, or 4 million shares? I do know someone is buying big time and that tells me they are expecting a squeeze, not a RS, and that would be good at least from my standpoint.
That was as of Friday. They start at 9:00am their time and it is about 5:30 am there now, I think
Nashville, how do you look that up? TIA
Spongeboy, you are theoretically correct. Problem is, if you go back and read every single post on here you would be lucky to find a very small percentage that contained what turned out to be facts. The facts we see in SEC filings are facts as of the filing, but not neccesarily facts 1 day before or 1 day after the filing. Rumors have abounded and yet very few if any have come true. Message boards by nature are where people get together and discuss their views and thoughts, which are mostly guesses, as to what or where the stock is headed. It wouldn't be much fun if we only talked about the facts as we know them as of the day we discuss them. To me, speculation is sometimes interpreted as rumor and Stoxmagic, in his post of a buyout, was just his speculation based on other people's speculation. Doesn't really matter, we won't know for a FACT what is going to happen until it happens.
Are you kidding? If they just went ahead and told us then they couldn't watch us sweat and squirm. lol No, they're going to make us sit through the whole show but I hope the ending is worth it.
That sounds like what I am thinking and yes, it would be the one sure way to insure that shorts are forced to cover. I guess we will now have to wait and see how it plays out this week.
A few of us came up with a thought. What if the reason D&T took us on was because they represent the Major Co interested in buying us out. Why else would a big CPA firm take on an OTC that is riddled with a naked share short position.
D&T represents Church & Dwight, Procter & Gamble, and Dow Chemical.
J&J, and Clorox have other CPA firms.
Thoughts?
When they buy out our air shares it would most likely be during a squeeze and it would be at the price YOU decide on.
Uranium, you may be under the impression that air shares have to be covered with a legitimate share and that is not right. All the shorts need to do is to buy back the air shares they originally sold and tell their broker to mark off their IOU. The air shares they buy back are electronically eliminated from the system.
So if there are 100 mil legitimate shares issued by the Company and there are 200 mil air shares illegally created by shorts, the shorts need to buy back the entire 200 mil air shares and cancel out the IOU. They don't have to buy 200 mil legit shares to cover the illegal ones.
A short never has to buy a legit share to cover, they just need to buy a share and then submit it to their Broker so he can mark it off his IOU. That takes that share out of the system and is one less air share to worry about.
You misunderstood what I was saying, or I wrote it badly.
I have 3 mil shares at original cost of .02 per share for a total investment of $60,000.
If the current price is .20, then after the split I would have 30K shares at $20 per share for a total of $600K. All of that is correct as you say.
What I was saying though is that when I got in at .02 I figured that if the stock went to $5 then I would make $15 mil for a profit of $4,940,000
But after the split if it goes up $5 then my increase in worth would only go up $150k.
I may have stated it wrong, but this is what I was saying.
There is no reason for the company to have to issue shares to allow the cover. If the shorts sold 1.5 billion air shares, then somewhere out there is 1.5 billion air shares being held. The only reason for the company to issue legit shares from their balance of Authorized Shares, would be for them to get all the money from the shorts instead of us. Our shares would then become legit and the O/S would skyrocket by the amount the company issued. Not a good idea.
ID, I think that when they get their kinks out of the system and advertisers see the possibilities, yes it will be a big company. I don't own any shares but it is definitely worth watching.
I think the big thing that a lot of us have against a RS is this:
When we bought in on the ground floor at say .02, we were looking at the future potential of this Company, and because the price was so low we were able to buy a ton of shares.
If a person had 3 mil shares at .02 and the Company succeeded and rose to $5 per share, then in essence, they made $15 mil.
But after a RS they would have 30,000 shares at $20 (using .20 as a current price), and if the stock goes up $5, they would only make $150,000. That is a lot of difference. Some may say that the price would rise proportionally to its pre-split price, but I disagree. A fast rising penny stock going up by a dollar is a lot easier than a high price stock going up $20, at least in my opinion. Besides all that, a RS just was not needed.
Very well put No Bs, and much simpler to understand.
I believe the collection order is Short Sellers first, Then MM's, Then Brokerages, but ultimately the onus is on the Brokerage Firms, ie. Scottrade, Td AmeriTrade, etc.
Some one correct me if I'm wrong, but the order to buy or sell is placed with a Brokerage Firm, then that order is placed with an MM. It is the responsibility of both the Broker and the MM to verify that there are shares available and that the shares are legitimate. None of them ever check it out. In the case of naked shorts, the Brokers don't want to do it but usually the seller who placed the short order is a large customer and they don't want to risk losing their business. In addition, they are playing the odds. Most penny companies end up going under and so the naked short shares do not need to be covered. In this case, Spongetech was the exception and became successful.
There are a lot of different MM's involved and a lot of Brokerage Firms involved. Between them and the short sellers and their assets, there will be plenty of money to pay us dearly for our shares. I would venture to say there will be no bankruptcies among them either.
Yes, but NITE has assets of a little over 2 Billion. They might have to sell off some of those assets, or arrange a loan.
OK OT let me take a stab at your question.
When sellers naked short a stock they tell their broker to sell and since they don't have the stock they tell their Broker to mark up an IOU for the number of shares he is shorting. That IOU remains due from the seller until he provides a share or he buys back the share he sold. The Broker always has a record of every share shorted and who shorted it.
At any time, all the Brokers out there who have IOU's for SPNG stock could, if an event took place that put that short position in jeopardy, call the short sellers and either demand more money in their margin account, or they could call for a cover of the shares. If the shorts either don't or won't pay up, then the Brokers have the right to liquidate any or all of their other positions and assets in order to buy up the naked shares. If the Brokers are still lacking enough funds to buy back all their customer's naked shares, then the Broker is responsible for the rest and then they can go back against the short seller.
For those shareholders who sell their shares, they are now out of the picture and no longer shareholders in the Company. For those who hold out for higher prices for their shares, then the Broker will have to pony up whatever they are demanding. There may be some shareholders who are out of communication and not aware of the cover, and I would imagine that their Broker would be trying to get in touch with them, but eventually all the naked shares must be bought back and the IOU's all marked paid.
In this electronic world, Brokers have the ability to match up every naked share with every seller who shorted them, and every holder of SPNG shares. Some shareholders may hold certs in which case they own legitimate shares, but without a cert every share could be a naked share. WE ALSO ARE PRETTY SURE THAT THE COMPANY OWN ALL THE LEGIT SHARES AND THEY ARE BACKED WITH CERTS, WITH THE EXCEPTION OF A FEW WHO ARE PROBABLY HOLDING CERTS ON THEIR SHARES.
Once the Company can account for the number of shares that match the number of shares issued through the T/A, then all others are obviously naked shares. I'm not positive, but I would say that the Company would at some point notify those individual shareholders holding certs and ask if they want to continue to hold legit shares or if they want to turn the certs in to the T/A and change their ownership to Street Name shares.
This is not as difficult as it seems especially in this case as the Company holds most if not all of the legally issued shares.
Most important thing to me is that it is the Brokerages who will be forcing the shorts to cover (based on an event that requires an accounting of the legal shares) and they are the ones responsible to us for our money.
I may have left some stuff out that you asked about, if so, ask again. My mind is getting boggled, lol.
I'm hanging, lol.
Somewhere today it was posted that the current O/S is 35 million shares. That is real close to what I have suspected. I actually thought closer to 10 Million, but 35 million is good. With a 20 multiplier and based on the $11 mil profit from last year, that works out to about $6.25 per share. Figure this years income and you can see where it would be. We don't need the R/S.
I agree flrda444, and I hope we all have that life altering experience, but we are all on our own and we need to be prepared. Go over your numbers and decide your minimums and then hope you far exceed them. At least that is my opinion.
That right there should tell you they checked availability and there is none, therefore they don't want to be responsible for your shares in the event of a cover and squeeze.
I haven't heard of an Optional Reverse Split
This is what was sent to me by my broker and when I Googled Mandatory Reverse Split, it showed several RS's saying there would be Mandatory Exchange of Certificates, so that is where I came up with it.
Scale of 1-10, probably 5 or 6.
Items For Attention - Mandatory Offer Details View Text Close Window
Description: SPONGETECH DELIVERY
Symbol: SPNG CUSIP: 849109103
Offer: MANDATORY
Offer Description: PROPOSED REVERSE SPLIT
Offer Dates:-
Meeting Date: N/A
Payment Terms:-
Pay Date: N/A Payment Price:
Converted To: Cash in Lieu Rate:
Conversion Rate: Rounding Factor:
***********************PROPOSED REVERSE SPLIT**********************
NOTICE HAS BEEN RECEIVED THAT THE ABOVE SECURITY HAS UNDERGONE A MANDATORY
REVERSE SPLIT.PLEASE REVIEW ANY PENDING TRADES, RECEIPTS, AND PRICING
PRIOR TO ANY ACTIVITY WITH THIS SECURITY.
PROPOSED TERMS ARE AS FOLLOWS:
MEETING DATE: N/A
RATE: 1 NEW FOR 100 OLD
NEW SECURITY NAME: N/A
NEW CUSIP: N/A
PLEASE NOTE THAT INFO CONTAINED IN THIS WIRE IS PRELIMINARY AND SUBJECT TO
CHANGE. ANY INQUIRIES SHOULD BE DIRECTED TO MANDATORY REORG DEPT.
It will Drew cause this is a Mandatory Reverse Split meaning in part that holders of certs must return them to the Company and exchange for new certs (at no cost to the holder). Therefore that is in itself an accounting of shares.
Yeah, my bad. I thought it was effective today, sorry.
Haha, you guys are amazing thinking this is a fluff PR. Forget for a minute about the supposed RS, assume you never heard of it. Our A/S is 900 mil and O/S at 500 Mil.
Everyone was saying how great it would be if we got the 10K and it showed 500 mil O/S.
Now, they have lowered the A/S to 300 mil, which means that the most the O/S can be is 300 mil.
So if you were excited about 500 mil it seems to me you would ecstatic over 300 mil.
Hey Taki, problem is that they will wait til the very last moment knowing that the Company can decide at the last minute not to do the R/S. So if the Company is trying to use the R/S to force a cover, it will be a game of chicken to see which side gives in first.
Whew!! I'm glad you said "All in my opinion", you had me scared there for minute.
Like I said, it could be because the O/S will be so much lower than anyone expected and they don't want the shorts to know the number. Ya think?
Power, not sure you would know a correct sentence if you saw it, but I do appreciate the hard facts you present.
I hear you, I have 3 million shares at .02 and this week has not been good.
I hope so, lol.
Good Point Lug, you are right on.
That is the million dollar question. Maybe to shake out weaks and day traders and eliminate anyone who would sell at below a dollar in a squeeze, or maybe to show the shorts a wakness to lure them into thinking they are still in charge, I really don't know. But I do know that the way they did it, 1 for 100, making the effective date 2 weeks out, and just the fact that they in no way need to do a R/S, convinces me they will never go through with it. A R/S usually indicates that a Company is faltering and about to go down, SPNG does not want that image, and they certainly don't fit that mold. This is a ploy and I am sure they have their reasons.
There has been nothing to change the fact that many will be millionaires. The fact is they will have less shares, but they will command more per share from the shorts. That is of course if there is a R/S, which I don't think will happen.
It wasn't Mags that sold it was my other daughter, and she bought back in today, Yay!!!! At least I think Yay, if this stupid squeeze will get started. lol
For those who believe the NSS:
I am going to assume that the RME shares have been bought back and that the remaining common O/S is 10 million shares (I know you will say impossible, but that is what I believe so play along).
09 Earnings of $11 million divided by 10 million O/S = $1.10 per share, based on previous years earnings.
Times multiplier of 15 = $16.50 per share
Times 100 from R/S = $1,650 per share valuation post split
If my goal is to get $5 per share based on pre split numbers, then post split, I will ask $500 for each of my shares. Sounds like a lot, but I would be selling for much less than true valuation.
Somewhere along the line, someone is going to have to buy my shares because with air shares, I can't go to nasdaq. And the Company does not want to take any air shares with them, they want to go into nasdaq clean. So, no matter what happens, I should be able to demand my price, and so should everyone else.
For what it's worth, I say there is no way in hell that the Company will go through with the R/S. You can change the numbers based on the OS you think will show on the 10K.
The Company is holding the 10K back for a reason, and my guess is that they don't want the shorts to know how low their O/S now is. They are waiting for the right time.
He's figuring a 100 for 1 split and not a 1 for 100 split.