MultiCorp International Inc (MCIC)

[emulwa]

Here are some mistakes that short-term bag holders do: Assume that we both have 10 million shares each costing each one of us $2,000. Then the stock prices shoots to $0.028 (my own prediction). You would easily be tempted to sell; say 5Mil at this price.

If you sell 5mil x .028 = $140,000.
Someone like me (long-term investor) would buy your shares on the open market for $140,000. Now I will be having 15mil.

Because of the bumpy road ahead, you decide to sell the remaining 5 mil shares at, say $0.035
$0.035 x 5 mil = $175,000 (I again buy your 5 mil shares at $175,000 giving me a total of 20Mil shares)

Your total proceeds = 140000+175000 = $315,000

Your total gain would be $315,000 - $2,000 = $313,000 (Not bad at all, but then you would owe the IRS short-term capital gains at about 25% tax rate because you held the stock for less than 12 months)

25% x 313,000 = $78,250 tax
Your take home would be 313,000 - 78,250 = $234,750

Now, my total cost would be $2,000 + 140,000. + 175000 = $317,000
But, I wait for 1 year to sell the 20 Mil at 0.28 (my own prediction)

Thus, 20mil x .28 = $5,600,000
Minus my cost 317,000
$5,283,000 x 15% Long-term capital tax rate

Tax = 792,450
Take home = 5,283,000 - 792,450 = $4,490,550

P.S. this only shows the advantages of holding a stock for over 1 year with everything being equal and the company’s earnings act as a catalyst for the PPS increase IMO.

These are my own opinions and should not be used to buy or sell a stock.