My take is that many folks are still in shock over the reverse split. No doubt. But let me give you my thoughts about what is going on.
First, it looks like the starting point for the new shares is going to be $2 per share. I say this because if you look on the 1st NRG Corp website $2 per share is listed under the quote section. But no volume yet. Why no volume yet? My take is that it could take awhile, maybe a few days or a few weeks to get the old shares converted and trading cranked up on the new shares. But that is just my guess. My old shares still show up in my e-trade account, but the FNRC name was dropped and a number assigned for reference. I don't think they are tradeable at the moment.
So why do a reverse split now? Again my take is that Mr. Norris, the CEO, is being bold and aggressive in his attempts to save the company and end up with a financial benefit to himself. No doubt he could have declared bankruptcy some time ago, but didn't. Why not? I think he has reasons for keeping the company together and can see the light at the end of the tunnel. You would have to ask him exactly why he apparently refused to go the bankruptcy route. In any event, I'll stick with him for the moment.
Keep in mind that Mr. Norris and one other director were awarded 15 billion shares last year for services rendered. The shares were restricted. All of the current creative financing and the reverse split could have something to do with the restrictions on those shares and the ability of Mr. Norris and the other director to either return some or all of the shares to the company or reap some kind of financial benefit from the shares for themselves. It is hard to tell because FNRC has not published a quarterly report at all so far this year.
When we do get our new shares, it is possible that we could see a spike in the $2 share price on news from either Wyoming or Ohio. I say this because the initial float looks to be only about one million shares (20 billion divided by 20,000). Plus, remember that 3/4 or that one million shares are held by Mr. Norris and the other director as restricted shares. So it is possible that the actual float could be as low as 250,000 shares. Good news plus such a low share count could send the share price up significantly. This may be Mr. Norris' plan. We'll just have to see.
Also keep in mind that 6 million additional shares will likely come on line in the next 6 to 12 months. This would be up to 1 million from the share dividend and up to 5 million from the series B conversion, if it happens. The series B shares are the ones being issued to the new investor who provides the new $2.5 million in funding.
So my conclusion is that we could lose everything if Wyoming and Ohio go poorly or we could see a pretty good pop if we get good news later this summer.
Good luck all and keep posting. I enjoy reading everyone's comments.
Cropduster
AI
