Saturday, February 29, 2020 9:36:47 AM
Trader53's - Custodianship Plays: Explained
I'll Alert you of stocks to Buy,
before the Run happens !
________________________________________________________________
Custodianship Plays : Explained
What is a Custodianship?
There are literally thousands of penny stocks
that are publicly traded.
It isn’t uncommon
for some of those stocks
to get abandoned by their control people
for a variety of different reasons.
When a publicly
traded company gets abandoned
it doesn’t just stop publicly trading.
The abandoned shell
will continue to trade
until the day that the SEC
files an administrative order
to revoke the Issuers registration
(for SEC filers)
or until FINRA deletes the symbol
(for non-SEC filers).
That can often mean years of trading as
nothing but a zombie ticker.
As abandoned shells,
the public Issuers will fall behind
with their business license at the state level
(since nobody is around
to pay the annual fees
due to the Secretary of State).
When two years pass
without an entity paying its business taxes
at the state level,
the entity becomes revoked.
This opens the
door for control of the public Issuer to be
taken over by an interested party
(a shareholder or debt holder for example)
through a custodianship petition.
The interested party
can file a petition with the local court
requesting that the court approve a motion
to let the interested party
(or an individual of their choosing)
take over control of the abandoned shell
“in the best interest of the shareholders“.
The only real concerns the court will have
is that there is no objections to the motion
and that the custodian has a clean background.
The petitioner has to prove to the court
that they have made a legitimate effort
to contact the former control people
and they have to convince the court
that the custodian is a respectable choice
with a clean background
that will act in the best interest
of the existing shareholders.
That usually isn’t hard to do
so most custodianship petitions
will be granted by the court.
The only exception
is usually when the old control people
do show back up to object
or if the petitioner voluntarily dismisses
the petition
(this may happen if the
SEC suspends the Issuer during the proceedings
or initiates an administrative order to
revoke trading in the Issuer during the proceedings).
________________________________________________________________
What Are Custodianship Plays
Why are some Custodianship plays such big movers?
Stocks that end up being taken over
through custodianship petitions can offer
several profit opportunities for
penny stock traders for a number of reasons:
1. The share prices have often fallen on
light volume to relatively low prices
(for the share structure of the stock)
due to years of inactivity putting some
of the stocks in extremely good price ranges
and setting them up with the potential
for large gains if interest builds for the stock.
2. Most have seen very little trading activity
for many years so much of the float is
owned by non-active traders that may not even
realize the stock has become active again ….
this means the retail/active float is
often even smaller than the true float.
3. Custodianship stocks are automatically
considered reverse merger candidates.
As reverse merger plays that allows for
the type of speculation that can create
big message board/social media pumps
_________________________________________________________________
Which Custodianship Plays are the Best?
Not all custodianship stocks will turn into good custodianship plays. So which are the best?
• Stocks that are in lower price ranges
(typical under $.01/share or in the low pennies)
with relatively good share structures for the price
have the biggest potential to turn into big plays
so they usually draw the most interest.
• Interest can also depend on who the custodian
is for the shell. Some custodians are
more popular than others. The custodians
that were involved in big movers in the past
tend to get more attention when
they do new custodianships.
https://otcmarketresearch.com/understanding-custodianship-plays/
SEC Form
15-12G
https://www.investopedia.com/terms/s/sec-form-15-12g.asp
________________________________________________________________
Trader53's - Pond-Fishing Plays: Explained
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=135550937
________________________________________________________________
________________________________________________________________
Embedded Charts
I'll Alert you of stocks to Buy,
before the Run happens !
________________________________________________________________
Custodianship Plays : Explained
What is a Custodianship?
There are literally thousands of penny stocks
that are publicly traded.
It isn’t uncommon
for some of those stocks
to get abandoned by their control people
for a variety of different reasons.
When a publicly
traded company gets abandoned
it doesn’t just stop publicly trading.
The abandoned shell
will continue to trade
until the day that the SEC
files an administrative order
to revoke the Issuers registration
(for SEC filers)
or until FINRA deletes the symbol
(for non-SEC filers).
That can often mean years of trading as
nothing but a zombie ticker.
As abandoned shells,
the public Issuers will fall behind
with their business license at the state level
(since nobody is around
to pay the annual fees
due to the Secretary of State).
When two years pass
without an entity paying its business taxes
at the state level,
the entity becomes revoked.
This opens the
door for control of the public Issuer to be
taken over by an interested party
(a shareholder or debt holder for example)
through a custodianship petition.
The interested party
can file a petition with the local court
requesting that the court approve a motion
to let the interested party
(or an individual of their choosing)
take over control of the abandoned shell
“in the best interest of the shareholders“.
The only real concerns the court will have
is that there is no objections to the motion
and that the custodian has a clean background.
The petitioner has to prove to the court
that they have made a legitimate effort
to contact the former control people
and they have to convince the court
that the custodian is a respectable choice
with a clean background
that will act in the best interest
of the existing shareholders.
That usually isn’t hard to do
so most custodianship petitions
will be granted by the court.
The only exception
is usually when the old control people
do show back up to object
or if the petitioner voluntarily dismisses
the petition
(this may happen if the
SEC suspends the Issuer during the proceedings
or initiates an administrative order to
revoke trading in the Issuer during the proceedings).
________________________________________________________________
What Are Custodianship Plays
Why are some Custodianship plays such big movers?
Stocks that end up being taken over
through custodianship petitions can offer
several profit opportunities for
penny stock traders for a number of reasons:
1. The share prices have often fallen on
light volume to relatively low prices
(for the share structure of the stock)
due to years of inactivity putting some
of the stocks in extremely good price ranges
and setting them up with the potential
for large gains if interest builds for the stock.
2. Most have seen very little trading activity
for many years so much of the float is
owned by non-active traders that may not even
realize the stock has become active again ….
this means the retail/active float is
often even smaller than the true float.
3. Custodianship stocks are automatically
considered reverse merger candidates.
As reverse merger plays that allows for
the type of speculation that can create
big message board/social media pumps
_________________________________________________________________
Which Custodianship Plays are the Best?
Not all custodianship stocks will turn into good custodianship plays. So which are the best?
• Stocks that are in lower price ranges
(typical under $.01/share or in the low pennies)
with relatively good share structures for the price
have the biggest potential to turn into big plays
so they usually draw the most interest.
• Interest can also depend on who the custodian
is for the shell. Some custodians are
more popular than others. The custodians
that were involved in big movers in the past
tend to get more attention when
they do new custodianships.
https://otcmarketresearch.com/understanding-custodianship-plays/
SEC Form
15-12G
https://www.investopedia.com/terms/s/sec-form-15-12g.asp
________________________________________________________________
Trader53's - Pond-Fishing Plays: Explained
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=135550937
________________________________________________________________
________________________________________________________________
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