~gm all. here some dd that’s important~lazar and shells~for those that don’t know david lazar custodian shells and track record~he is the king~ EGOC an 8k earlier in the week were Lazar successful took over complete control of EGOC in every capacity~read below we past the court stage and filing stage~now we wait to see what company or what Lazar does with it~EGOC moved fast through courts to 8k and we should hear the plan here in a filing shortly~that’s the 2nd wave of big gains in playing shells.~ this is explained in last 2 paragraphs on the bottom ~2nd wave ~This is where we are now in EGOC
Custodial plays are when a “shell cleaner upper” of sorts comes in and takes over a defunct publicly trading company. A shell, a public company that has a share structure in place, but no real assets or company inside it. These shells, due to having no business in them, most likely will not trade, will not have filings and will not release news – thus falling dormant. Due to the fact the stock has become a “ghost town”, the share price has been beaten up and usually at 52week lows with a market cap equal to peanuts.
When a custodian comes in and takes control of the shell company, they most likely clean it up with hopes of finding a private company looking to reverse merge into the shell. The excitement, anticipation and speculation of someone putting a new business and assets into the shell draws penny investors into these lottery style plays. OTC investors call these “lottos”, because the risk to reward potential is significant.
The mindset of the investor is that of, I’m buying shares of a depreciated company cheap, with hopes of a company worth lots of money reverse mergers into it, thus making the valuation of the shares I own, worth a lot more.
Here is an example of a REVERSE MERGER that “was” a play and in our opinion still is! The company is Verity Corp. (OTC: VRTY). In April of this year VRTY was just $0.0067 a share and hit a high of $0.13 in July, a 1,940% increase, after filings and news came out that a health solutions company named HSI was ultimately reverse merging into the failed agricultural company.
Now that the initial “luster” has worn off from July, the company had laid quiet and dormant for many month months until Thursday afternoon when they announced the addition of a new board member. Due to the lack of follow up communication with the investment community, the share price also mirrored the lack of interest and fell to a penny.
As mentioned, I think there is still a major play here. As the pic above illustrates, the current market cap at $.015/share is $191,000. This is the cost of a non-reporting shell in the industry, but the real kicker is when researching HSI’s website, under company news, their March “Shareholder Update” shows that their FINANCES consist of an excess of $80 million in assets. So, my question to you as the reader and most likely investor is… why is a company with over $80M in assets trading with a $191k market cap? This is where the opportunity may lie. Investors buy into these plays with hopes of something worth much more takes it over… well here is a prime example. Those who already own shares, hope that Thursday’s press is the start of a news cycle that will paint a larger picture of the immediate future of the company. Financial Filings would also be significant to confirm share structure and overall valuation so traders can justify just how much higher VRTY should trade at.
Recent Big Reverse Merger and Custodial Plays
I apologize in advance as I know I will miss many other plays that have done well, but my goal is to show our readers that investing in these plays can make you a ton of money. They require a combo of luck, patience and plenty of due diligence. Here are 7 big winners I recall recently:
OTC: MSTO – Masterbeat Corp. is a reverse merger where SBQ Holdings, a real estate and precious metals asset company, became a subsidiary. The stock was only $.007 in June and hit a 52 week of $0.35 later that month (an increase of 5,000%). Today, MSTO is back under 0.02 as investors wait on audited financials and more assets to be announced so traders can truly figure out a proper valuation.
OTC: EXLA – Helmer Directional Drilling is a custodial play. In mid-September EXLA could be bought for as cheap as $0.002/share and has since peaked at .0149 (nearly a 750% gain) and still holding above a penny. EXLA has a court date today November 8, 2019.
OTC: KDCE – Kid Castle Entertainment is a reverse merger play. In mid-September KDCE traded at around $0.03/share and hit a high of $2.50 (an 8,333% increase) on filings that a cannabis company was rolling on in. Today, KDCE has given back most of those gains (now .37) yet is still well over a 1000% higher than its original start off price.
OTC: EMBR – Embarr Downs Inc is a custodial play with its court date upcoming on November 19th of 2019. Last month you could have grabbed EMBR at $0.0007 and has hit a high of $.0045 (nearly a 643% gain) and still holding at .0033 as another rising wave should come in as the date draws near.
OTC: ADIA – Adia Nutrition just had takeover granted yesterday November 7th, 2019. In mid-April ADIA traded as low as $0.0018/share and today it hit a new 52 Week high, reaching $0.054 intraday (a whopping 30 bagger or 3000%)!
OTC: CRVH – Chilco River Holdings Inc. had its takeover Granted a couple of days ago, but all of its action seemed to have happened a month or so ago. In mid-June, one could have grabbed CRVH for .004/share and sold it for $0.06 in late September for a 1500% return! Today, CRVH is still strong, trading around .03 a share, 750% higher than where it was in June.
OTC: CLSI – Clancy Holdings is shell waiting on a merger candidate, but many believe someone has already has plans to go into it. After nearly 10 years of o filings, the company in late September started filing their financials. When one asks WHY? The answer is quite simple, they needed to have audits for a reason. Before the filings hit at the end of September, CLSI was as low as .009/share and quickly rose to a high of $.117 a few weeks later on rumors of a merger. This craziness caused a potential increase of 1300%. Many traders got caught paying too much for their shares and are not happy with the stock sitting in the low .02’s, but merger news could turn that frown upside-down in a hurry.
Popular Custodians
At least in the social media land (aka twitter and financial forums), investors that take advantage of these style of plays tend to follow a handful of players in the custodianship world of over the counter shells. These names that circulate are David Lazar, Joe Arcaro, Mr. Glass and Rhonda Kheveaney.
Earlier this year, some custodial plays were on fire also. I came across this well written informative article that goes into great detail explaining the custodial process, what they are, the difference between a legal and a fraudulent takeover, along with what exactly happens after custodianship is granted.
The 2 Waves of Custodial Plays
So, it seems as if there are 2 waves of opportunity when investing in these “custodial plays”. The first wave comes when investors catch wind the shell is up for a legal/court decision on whether or not the custodian is granted control of the company. This can generate a significant amount of interest and share price appreciation because traders know that this shell will eventually be on the block as a reverse merger vehicle for an opportunistic private company looking the enter the public arena. The first wave of investors are made up of quick flippers that will play the anticipation and feed off the custodial traders and lotto players – they are in and out. The rest wait patiently for the reverse merger to happen and create the 2nd wave.
The 2nd wave happens when the new company buys a controlling interest or puts an asset (usually a new corporation) into the public vehicle. Again, investors hope that new company is worth millions and millions as it comes down to basic math after that. The more the company is the worth, the more the shares will be worth and the bigger the potential gains.
