Here's my take on the situation with MGT as I understand it. If any of my statements are inaccurate, please feel free to correct me:
1) IMO this is basically a reverse merger into a shell company. McAfee probably wanted to run a public company again but didn't feel like taking his private company through the IPO process so he went this way instead. I've seen a few examples of this where the stocks did pretty well. One was ONVO. After they did the reverse merger, the stock went from $2 to as high as $12 or so. Another one was an Elvis Presley memorabilia company and that shell company stock went from pennies to close to $20 if I recall correctly, so it can happen. MGT currently having only 27 million total shares changing hands will be very helpful. Yesterday alone every single company share churned one time. I expect as this story begins to get more coverage, a lot of people will see this opportunity the way I do. The volume will only continue to increase and then the stock will come into focus because it's had such a big move. Maybe this could best be described as an upward spiral...
2) Most institutions can't even start buying until the stock is at $5 and you know that they want a piece of the action on this stock.
3) The press release said that D-Vasive was given ~24 million shares, representing approx 47% of the company, so combined with the other 53% of the shares, there will be approximately 51,000,000 shares outstanding when the shareholders approve this deal.
4) Based on yesterday's closing price of $1.27, the market cap of the company is approximately $65 million and is being run by one of the greatest minds in internet and mobile security with an innovative mobile security product just about to launch. He also sold his last publicly traded company for $7.6 billion dollars to Intel. Yeah that too. What do you think this stock is actually worth in terms of market cap? How much is McAfee being the CEO worth, pre-launch of D-Vasive? I think that the valuation will settle in around $300 million and then the share price will fluctuate based on the success (or failure) of the D-Vasive product launch and how much revenue it's generating for the company. $300 million would be about $6/share based on 50 million shares.
5) The chart doesn't matter on MGT right now. It's a better, different and fundamentally transformed company. The chart was based on the fundamentals and performance of the old company, not the new one. Will there be some long-term holders who are just glad to recoup their money now that the stock is running? If they're dumb and don't see the potential here then they will.
I honestly see this as a great opportunity that despite a huge move still has a ton of upside because a market cap of $65 million for this stock in this situation is wayyyy too cheap imo. I think this will probably see $5 in the next week or two and then work it's way up to $6. After that, it's anyone's guess. Good luck and congrats to everyone here who has made good money on MGT over the past few days. Thoughts and/or opinions on this post would be appreciated.
AI
