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That depends on the nature of the acquisition. If the acquired company is to continue operating as a semi-independent wholly owned subsidiary, it would not be that strange - particularly if there are no existing software solutions in place at SHMN that could be leveraged instead of the newly acquired software.
Hello darkness, my old friend
I've come to talk with you again
Because a vision softly creeping
Left its seeds while I was sleeping
And the vision that was planted in my brain
Still remains
Within the sound of silence
Again, a contract has three components: 1) offer; 2) acceptance 3) consideration
You can read whatever you want into the PR, the above is black letter law.
A proffered executed agreement constitutes item 1. A returned countersigned agreement constitutes item 2. After the deal is signed, cash needs to change hands/ownership must be conveyed - this is item 3.
Legally, until this happens, the deal is not sealed.
Not trying to be a pedant, but as my handle implies, this is my wheelhouse. In the Pinks, misinformation inevitably leads to heightened and then dashed expectations (and often corresponding fluctuations in PPS) by those who don’t do adequate DD. I want this to rise, but I want it to rise based on facts and fundamentals, not hype (even if the hype is well meaning).
This.
Agreed. But until those updates have occurred, and barring any other information, the transaction is not yet complete.
There is a lot of frustration on this board about PPS not moving on news...my point is that the news to date is not definitive; the company has not reported that the deal is closed, nor has it disclosed any relevant financial details. Until they do so, it is not realistic to expect the market to move.
That said, I have a genuine desire to see full and substantive disclosure made sooner rather than later, if only to ensure that potential investors who have been scared off by other pink pumps, or by SHMN's previous failure to follow through (accompanied by lots of silence). I continue to operate under the assumption that this disclosure, when made, will bring good news and benefit all current shareholders.
From OTC Markets Pink Guidelines:
And that's fine. I'm rooting for SHMN as much as anyone and want you to be right, but unless you have a track on some inside information, you're making representations that are not backed up by the Company's public disclosures.
As I have been saying repeatedly, it's critical that SHMN be as transparent as possible. They recently tweeted out a plea for investors to refrain from speculation, but in the absence of public disclosure, it's either speculate or assume that nothing has happened - I choose the latter until they can prove me wrong.
No, it is not "sealed"
We are in the land of 15c2-11. If there is a material deal, the company has to report - this is the very definition of 'adequate public information'. Until it is published as a current report or as part of their quarterly/annual reports, it is only a rumor.
Right now, the Company has indicated only that the deal is SIGNED - not that it has been closed. Of the three components that constitute a binding contract, we supposedly have two - offer and acceptance. Until consideration has been received, the deal remains "unsealed"
And if you're foolish enough to "trade" in a sub penny with an 11MM share per day average and get disappointed that you failed to make any money, you might want to consider "investing" instead.
uh-huh. 30d average is 11MM shares.
Bye Felicia.
Depends on how the deal is structured. One thing to clearly distinguish: a signed purchase agreement does not mean the deal is closed. There may well be various contingencies around delivery of funds/shares, audits of inventories, etc.
Of course, it doesn't necessarily mean the deal isn't closed either.
Interesting to note that a fully reporting company would be required to file a Form 8-K providing at least an outline of the salient deal points for such a definitive agreement. I would hope that SHMN gives us a materially similar ‘current report’
Don’t expect to see these before they are due (on November 15). We may get some tweets, but likely nothing substantive until then.
Hopefully, I'm not over-parsing, but the phrasing of the PR makes me wonder if the delay may be more significant:
"the Company expects to update its stakeholders for more encouraging updates about the Company and its operation in the coming weeks and plans to update 3rd quarters financials and much more."
This seems to link the updates to Q3 fins - if this is indeed the case, it may be as long as 45 days until we see something definitive.
Still sounds like good news, but I know I'm tempering my expectations a bit...
Some important math when considering panic posts about illusory sell-offs:
(4,844,188*.88)/1,257,081,890=.0034 - one third of one percent of the float have been sells.
(4,844,188*.88)*0.004853=$20,794.55 - those sells, trading at VWAP constituted less than $21k.
The changes to rule 15c2-11 were adopted by the SEC on September 16. Following their adoption, there was a 60 day public comment period, and then a 9 month period wherein the rule was in effect, but was not enforced.
September 28 marks the end of that 9 month 'grace period', and denotes the day that the SEC will begin enforcing the amended rule.
As an aside, it is actually the markets themselves that will make the required changes - OTC Markets will be the one to de-list any company that does not have adequate public information posted.
A few interesting notes about Drex's most recent Form 4:
1) Although the $2,457,549 note was nominally converted 08/13/2021 - squarely in the middle of a flurry of PRs about all of the "good" stuff that was happening - the Form 4 wasn't filed until 08/17/2021. There has been only one PR fluff piece since then, and Madcow went to great lengths to point out how illusory that news was.
2) The Conversion stipulates that the price will be determined on 10/15/2021 - two full months after the deal was done (while the Company was trading in the $1.40-1.50 range).
3) Since 08/13/2021, MSLP PPS has fallen by nearly 50%, and continues to drop on a near daily basis. As noted, the Company has been dead silent during much of that time.
Now, I'm not blaming Drex - it is entirely possible (likely) that there is simply no good news to report.
However, a cynic might say that continued silence by the company while PPS drops like a stone benefits him more than anyone else (save maybe Madcow, who is as dedicated of a short as I have ever seen). Wouldn't it be an amazing coincidence if there was suddenly a report of wonderful news (early report of a profitable quarter, major deal closed, maybe a potential buyer) on 10/16/2021?
Indeed. Looking at the 28th...big day for OTCs.
Not so much thinking the worst, but rather trying to come up with a possible/likely explanation for why things aren't moving along more quickly.
When I see 'on or before' in a contract or PR, I always want to believe that 'before' is the operative term (although it seldom ever is).
Yup.
Totally agree. I simply wonder whether the deal was set with certain expectations when PPS was closer to a penny, and now the parties are renegotiating based upon the current half penny reality.
My entirely unfounded guess is that they have a third party lender who typically does convertible notes, and the drop in PPS has induced them to seek some more concessions from SHMN to fund the deal.
Totally ATMO
It is quite likely that there is some sort of equity component to this transaction; SHMN is clearly not in a position to make a cash offer, and likely would have a difficult time securing a traditional loan to move forward. Unknown/unknowable if the equity piece would be directed at the acquisition target, the lender, or a combination of both.
In any event, despite being up almost 18x YoY, PPS is currently down 3x from it's peak. If the deal was initially structured while PPS was higher (or trending upward), the current stagnation may well have introduced some delay as terms are revised.
Please note, this is all speculation based upon other transactions I've been involved with - I have not been in contact with the Company, and am as in the dark as anyone about this current deal.
Agreed.
It's absolutely critical that the company understands that they have clearly stated that the agreement will be signed on or before the end of Q3. They absolutely *must* provide details by then. If the closing is delayed, they need to say as much.
The sporadic cries of market manipulation that started after their failure to consummate the buyback (and ensuing silence) will get a hell of a lot louder if they go quiet again.
The float is 1.25 Billion shares. A few million is barely a rounding error, and hardly constitutes 'dumping' in any meaningful way
As has been said ad nauseum on this board, until there is news, there won't be any real volume. Without real volume, PPS is ultra susceptible to variability that looks huge from a percentage perspective (.061 -> .045), but reflects trades of only a few tens to hundreds of dollars.
Management needs to acknowledge that they are responsible for two things - running the business (which fins show they have been doing a decent job of recently), and performing their fiduciary duty to shareholders (ie, creating/maintaining shareholder value, which they are somewhat inconsistent at).
It's a balancing act, but one that they need to do a better job of - if I could tell them one thing, it is to be more transparent/disclosive, even if the update is that "there's no news right now"
I don't disagree. My point is that the Company can't do anything to compel the retailers to acknowledge a relationship that doesn't exist - they have no direct dealings with Publix et al.
What I *would* like to see is more transparency about the third party managing distribution. Provided the white label agreement doesn't prohibit such disclosure, the Company should share some more detail about that relationship, including acknowledging the name brand under which their products are being sold.
The supply chain to Wally World is through a third party (SHMN is white labeling). Unfortunately, unless this arrangement changes you'll never see that PR from Wal-Mart.
Ha! I'll start with a double bourbon, neat (and see where things end up)
Between MM's, shorts, and accumulators the pinks are always being manipulated. This one is no different. I could screenshot the L2 of another company I'm in where MMs' are buying on the bid and selling on the ask to try to bring PPS up. 1:1 trades...it would be funny if it weren't so transparent.
Keep in mind that even now, SHMN is trading >10x over where it was less than a year ago.
- People in during the trips are sitting on their hands until something happens to make them move, knowing that they could probably dump now and take some serious profits.
- Skeptics on the sidelines wondering if they should get in now are waiting until something happens to make them decide whether to go/not to go (with some badmouthing the company to justify their hesitation).
- Speculators bought on the rise (with some continuing to dip in now), hoping that things will pan out.
All of the above means that it is unlikely anything substantial will happen until go/no-go news comes out.
$1MM in pre-orders, expecting to hit $30MM in 2023. Drex is betting heavily on the energy drinks...
https://www.musclepharmcorp.com/prviewer/release_only/id/4837040
Honestly, I think in this case potential investors are waiting for the company to prove itself. The current PR (and last quarter's fins) are huge, in that they show the company is still invested (pardon the pun) in its shareholders...But they're not enough to lure new investors in, probably due in part to the previous buyback debacle and ensuing dark period.
This is the ultimate case of 'the proof is in the pudding'. The upside to the acquisition is potentially huge, and if the company is able to demonstrate that they pull something like that off, they'll be very attractive to those sitting on the sideline.
Also note that the anticipated close date for the acquisition neatly parallels with the SEC 15c-211 enforcement date. Could well be a perfect storm...
It's fascinating to see how the lack of movement can be attributed to the classes of buyers/sellers.
While the OS/Float is objectively huge, there is a relatively small number of actual investors (myself included) who are sitting on relatively large piles of stock, minimizing the real world float while waiting for the next shoe to drop...the 'true longs' so to speak.
In the meantime, I suspect there are a number of *potential* investors - folks who may hold a few shares, might want to acquire a few more, but are locked in on the sidelines waiting for an update before they pull the trigger.
At the same time, there are traders focused only on daily flux, and whose constant activity (short or otherwise) may provide minor short-term gains, but inhibit any longer term runs (pending actual updates by the company), minimizing both their profits, and further locking in the investors and keeping the potential investors on the sidelines...
It seems like everyone is waiting for the company to make an announcement, and then all hell breaks loose (whether up or down).
Yup. Everyone (investors & traders alike) seem to be waiting for a go/no-go. Until the Company speaks up, we're sitting here twiddling our thumbs.
You and me both!
The shares would have been issued as restricted, and would then need to have the legend removed (it's not an automatic process, and depending on the broker and transfer agent, can be a serious PITA).
As a former insider, she would be forced to utilize rule 144 - 4(a)(1) isn't available to insiders at all - which requires adequate public information. The difficulty there is that the company was dark for an extended period of time, which would have precluded removal of the restricted legend until it became current and posted all of its prior quarterly/annual reports.
Again, I'm making some assumptions, but don't have solid info one way or the other.
I guess I just assumed they were - she received them as an insider. It's definitely possible that the legend had already been removed.