is...retired
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This RS is not about Nasdaq. It is about making room under the AS for converted debt shares. You can't sell more shares than are authorized, and the new loan may have taken them past that limit. Raising the A/S requires shareholder vote and SEC approval - that would be the wrong direction to go, when an already-approved 1 for 4 reverse split does exactly what is needed.
Actually, this is almost all in my 401K rollover IRA. No taxes, no keeping track of dividends, buys/sells, none of that. I am taxed only on my distributions, the same as a paycheck would be.
This is all pre-tax money to start with, and I always had my company match maxed as well.
So, using pretax money, and wisely multiplying it outside the tax structure can be quite profitable.
Unfortunately for me, in 2008, my company (directed) 401K dropped by 50% and I got laid off as a bonus. I converted my 401K to a 401k rollover IRA at etrade, and never looked back. I knew I could do better than to lose 50% of my IRA and in fact have never lost any since then. It's up about 10X in the last 5 years.
I started learning slowly, read everything I could find, and watched for rare opportunities to take advantage of. ICLD is one of those, at JUST the right time for me to fully embrace it. I don't day trade at all. I just buy what I think will do well after much DD, and if it doesn't do well, I sell it. If it is consistently green, I keep it and watch for changes in fortunes in those companies. I visit every stock, every day. That is my job. It pays better than any job I ever had.
If the R/S were done today, you would have 1/4 as many shares, but each one would be worth $.179. There is absolutely no change in value, and I don't feel that the share price will drop as a result of this type of action. There is no reason for it - this is good business operation.
There is absolutely no bad news associated with it, but the good news is that O/S hard limit at 500000000 A/S is removed.
It is a new loan that retires other debt. They get 2 years to pay it off, so conversions are not likely...they should be profitable enough to pay the loan back. Think of it as a consolidation loan, with no more conversions/dilution in the pipeline. A very smart, good move for the company and shareholders.
That won't happen. I'm looking for $10+ in time...years, maybe. Hard telling if Google or another big player might swoop in and buy it out. That would hurt that company's competitors. With debt behind them and relisting on nasdaq, icld becomes a pretty attractive target.
It was actually a special dividend of $2.91 on $pip that funded it. $400k on that deal. Half to icld, still have half cash.
I bought my first 500K @$.021 Jan 17 when it was still on Stock Twits. Averaged down for weeks, a mil here, a mil there. My best buy was at $.012, and that got my avg down to 0.175. Avg is now $.0205 on 10 m shares. Didn't know of Sunny or others on this board then, but solid reinforcement here of my own DD caused me to sell off other stocks and pour it into ICLD. Glad I did, I just couldn't see how it could go wrong.
Yesterday alone, I was up $165K. That is life changing, I assure you all. Sometimes, it is just necessary to take a huge risk, if all the stars align for you. This was mine. I expect it to hit $0.10 soon, which will be my first $1m. As a retiree on SS, and that is exactly what I needed.
I may buy more on Monday after the smoke clears at open. I'm holding all until $.10, then will recoup at least half my investment and ride the rest to see where they go.
By law, they can't have more potential conversions to stock than the total amount of authorized shares (A/S). It takes a shareholder vote to change the A/S. A reverse split cuts the O/S by the ratio, but leaves the A/S alone. That leaves room for all conversions to occur without violating SEC rules. Simple.
The reverse split was already approved in 2016. They are just now getting around to implementing it, since they have refinanced some debt to yet another convertible loan, but they have 2 years to pay it off first. Thus, they may never see the conversions, but they have to leave room for them, legally. This is actually good governance -they are doing the right thing for the right reason.
You need to see all the pages of the 8K. It is not in the synopsis page.
You're free to read the 8K, where it is stated. Link on this home page.
They refinanced some debt with a convertible loan. They have two years to pay it. A reverse split of 1:4 by end of month will make room under the A/S for the conversions, even if they aren't ever converted.
I'm one of those. I started buying ICLD on Jan 17. Came here after ST dropped it. Glad as hell I did.
I finally got the last of my 10 mil. Had to average up a little, to $.0205. Today is the first day in my trading life that I was up over $100K in one half of a trading day...wow!
It is going to be an interesting month.
It is not new debt - it is refinancing some existing debt as stated in the 8K:
In an effort to facilitate the Company’s previously articulated recapitalization, non-core asset sales, as well as a conventional asset based lending solution, to reduce the exposure to remaining convertible debentures, on March 9, 2017, the Holder, the Company, and a third-party investor (the “Assignee Holder”) effectuated a two-part exchange with respect to a portion of the Restated Debenture in which the Holder assigned a portion of its interest in the Restated Debenture (the “Assigned Debt”) to the Assignee Holder pursuant to an Assignment and Assumption Agreement, dated as of March 9, 2017, and simultaneously therewith, the Company, all of its subsidiaries, and the Assignee Holder entered into an Exchange Agreement, dated as of March 9, 2017 (the “Exchange Agreement”), pursuant to which the Company issued to the Assignee Holder a 4.67% Convertible Promissory Note, dated as of March 9, 2017, in the aggregate principal amount of $550,000 (the “Exchange Note”) in exchange for the surrender by the Assignee Holder of the Assigned Debt. The Exchange Note has a maturity date of March 31, 2019, provides for the payment of interest in cash or in kind, is convertible into the Common Stock of the Company at the option of the Assignee Holder upon the terms set forth therein, is subordinated to the Senior Debt of the Company, and contains certain trading restrictions, as defined therein.
Reverse stock splits don't affect the number of authorized shares, but a forward stock split issues new stock from the company's authorized shares.
About Stock Splits
So, you see, an R/S is a way to make more room under the Authorized Share maximum. That is what is happening here - there have to be enough unallocated shares to account for any conversions, and a new conversion was just announced. They may pay it before the conversion, but there has to be room for the conversion, in case it goes that way.
Getting to Nasdaq is not the goal with this R/S. It is to allow for conversions, which cannot exceed the A/S. The O/S is being divided by 4, so there will be plenty of authorized shares available for conversions. We are essentially unaffected, though we will have fewer shares worth more.
Yes, it is a typo.
There is no such thing as a 4 for 1 REVERSE split.
It has to be a 1 for 4 reverse split because they could not exceed the AS, which is 500000000. A forward split would only be possible if the AS was increased by almost 4X, and that can't be done overnight. The RS was approved last year, and is being implemented by the end of this month. It is a good move, because it allows the O/S to grow without hitting the A/S. We benefit with a higher stock price.
Just the opposite.
It is 1 for 4, meaning you get 1 share for each 4 you currently own. Only applies to O/S, A/S is unaffected by a R/S. So O/S will be 25% of what it currently is, and we all will have 25% as many shares, but worth 4X more each.
I got 500K today at .024. Average is still below .019. 9 mil now. Still want 1 mil more, but will wait for a pullback. I want each .10 increment to be worth $1M. All the way to $1 and beyond, if it holds.
I do due diligence before I buy. That is the most important step.
I set a limit of losing 50% at some point before it makes money. If it loses 50% of what I paid, I dump it. Worst mistakes are holding stocks that are sinking, thinking they'll recover. Better to exit, wait for the bottom, and, if conditions warrant, get back in. You could set a lower loss level, but OTC can jump around quite a bit.
When it makes money, sell some to recover your investment. Keep doing that until you have your entire investment back, then use what remains to play with 'house money' to see where it goes.
Don't do ANYTHING without understanding why you are doing it. Based on DD, not on what people say - there is no way to know the difference between the truth and pure fiction.
A buyback would imply money to pay for shares. They would have to borrow to get money. They are already in debt. They would have to go further into debt to buy back shares. A buyback implies profit that needs to be returned to shareholders. We ain't close to that yet.
While an R/S doesn't affect the A/S, it does mean (the fewer) shares held by shareholders are worth more by whatever the ratio. But convertible debt usually is listed at a particular price, and if that price is not adjusted by the R/S ratio, it would be a very bad idea.
That is likely why the R/S is not yet implemented. It only makes sense when there are no more conversions in the pipeline. At that point, the R/S simply reduces the number of shares held and increases the price. If that price doesn't help toward getting relisted, even that may not make sense.
Or, you could say they bought it for under $1m, used it for 2+ years, with somewhere around $20m earnings, sold for $5m. Sounds like a pretty good move, to me, since they are using it to reduce convertible debt.
What happens when A/S is increased?
Generally the stock price drops, because the market cap doesn't change just because there are more shares authorized. So, authorizing more shares drops the stock price, and an R/S removes a percentage of shares and increases the price of each remaining share by that percentage.
Effect of increased A/S
As a director in a public company previously, I can tell you that we had strict rules on making public statements. What a receptionist says on a phone is not a public statement, it is just rambling chatter. They might leak what the common rumor is in the company at the time, but no one like a secretary would ever speak for a public company.
When a public company KNOWS when they are going to do their ER, the often make a SEC statement about it. If you don't see anything posted in a company's financial statements, there is no news. So that is the ONLY 'Horse's Mouth'. Stalk the SEC financials to get fresh news.
Not sure why you say that. A R/S doesn't affect market cap - it is still X shares times Y price, which doesn't change in an R/S.
If my million $.02 shares becomes 250K $.08 shares, I'm fine with that.
What on earth are you saying? They authorized more shares then immediately reduced total shares? Why would any company do that - it costs money to make such transactions?
I would take them, but still waiting for some sells to settle at etrade.
I, for one, do not understand what you are saying. Why on earth would shorters go to work with fewer shares available, and at a higher price? That would be very, very risky to them.
A reverse split removes shares and increases the value of each. 500000000 R/S to 1:4 would result in 125000000 shares at 4X the price. So, an RS is exactly what should be done once the dilution is complete. At current A/S, I don't see any possible way to get relisted without an R/S. And, I think it would be higher than 1:4, since that won't get the stock price to a listing level, unless they wait for an sp of $1. I don't think we will see that with the current A/S.
A turnaround generally means a company has improved. Stock price from $.25 to $.01 isn't a turnaround, it is a disaster.
Yes, for uplisting. Nas or nyse. By getting the stock to the $5 range, institutional buyers would be more interested. Under $5, not so much, but $3 would be enough to get relisted on NYSE.
So you think 10B shares is a good A/S? I was thinking a bit less. 1:100 would yield 5B, which still seems too high to me.
500M/250=2B, by the way, which seems to me like a reasonable number of authorized shares.
What are your thoughts about a reverse split after the dilution is complete? I'm thinking somewhere around 1:200, which is one reason my target is 10M shares. That would leave me with 50K shares worth at least $4 to enable relisting.
For those thinking reverse splits are bad, they are not. They are anti-dilutive, result is no net value change, but fewer shares authorized.
Due Diligence (DD) defined
Due Diligence
It means study a company before you buy its stock.
I suspect the change of timing is to get some news that cannot yet be announced into the earnings report later. We know they are working to sell another non-critical asset, but that deal may be pending and would want to be announced with earnings. That would be positive news, and would affect debt, which is the albatross for $ICLD
T-Trades - Definition.
DEFINITION of 'Form T'
A form that FINRA requires brokers to use for reporting equity trades executed outside of normal market hours. Form T trades occur during extended hours - before the market opens and after it closes. The objective of the Form T reports is to maintain market transparency and integrity.
BREAKING DOWN 'Form T'
Trading in extended hours enables investors to react quickly to events that typically occur outside regular market hours, such as earnings reports. However, liquidity may be constrained during such Form T trading, resulting in wide bid-ask spreads. Form T trading is especially suited for overseas investors, since they may conduct the bulk of their U.S. trading when their markets are open but U.S. markets are closed.
The growing popularity of electronic communication networks means that Form T trading is bound to continue increasing.
I'm not to 10M yet, but I don't do screenshots of my portfolio. NOR - do I have any reason to lie about it to a bunch of people I don't know.
I just feel that this is my one big shot to quit fooling around and park most of my money in good dividend stocks. If it gets to $0.10, I make my first $1M. 90% of my ICLD is in my 401K Rollover IRA - no taxes until I withdraw. Gotta love an IRA. That is all before tax dollars anyway, and has many company matches in it too. I'm retired now, but not quite self sufficient. That is my current goal.
8.5 million shares now...need 1.5 million more b4 I stop accumulating. Average is 0.18 now.
Wednesday - shorts beware!