China Medicine Corporation (CHME)

[horst]

Yes, custodian applicants have to be shareholders, but typically if there's front loading of common shares it happens more than a few days before an application.

The custodian sometimes, not always, winds up with the conrol bloc and sells it. Yes, custodians can make a lot of money doing this if the custodianship is successful and if they're able to bring the company current and sell the shell. If there are problems with the shell, their investment in legal, court, and accounting fees is all for nothing. They're far from risk free. Custodians don't give away preferred stock though - a typical clean shell costs the incoming company between $150,000 and $250,000 in cash. Then the formerly private company, which is going public through a publicly traded shell, will grant shares to its stakeholders in the formerly private company. This just makes sense - they're not bringing their private company into the shell just for the benefit of legacy shareholders of the shell.

I don't understand your last question - custodianship stocks are like any other stocks: the price goes up when there are more buyers than sellers, and it goes down when there are more sellers than buyers.