Reverse Mergers & Low Float Plays

[Potse]

Traderfan...ADMG legacy valuation is hard to ignore.......

Somebody is really dumping a ton of shares low lately on this one. Another 300k yday alone, almost all at 05. I wonder where these shares are coming from.

Definitely has been some relatively strong selling pressure on ADMG here recently. I wish that selling pressure would have shown itself earlier this year when I was trying to get shares around this five-cent area. That would have made accumulating a position so much easier.

I wasn't planning to add to my position after my last post, but decided to pick up one final block of 30K at 6 cents. This investment may end up completely blowing up in my face, but I made the decision to swing for the fence. A little over 800K shares with a cost basis under 11.9 cents per share. Over 22% of the current unrestricted shares. I think PIHG is the only other investment where I own around 20% of the current unrestricted (about 15K of the 76K unrestricted).

As much as I hate seeing this kind of selling, I guess I take some comfort in knowing this kind of thing seems to happen on quite a few shells/RMs that eventually work out reasonably well for me. My personal experience: 1) I start accumulating a position and at some point during that accumulation there seems to be an awful lot of shares available for sale. 2) At some point, I have at least a 50-75% paper loss on my investment. 3) And at some point, I begin to seriously second-guess my decision to buy the shell.

I think all of the above applies thus far on my ADMG experience. Larry Eastland could fill this with a sub-par reverse merger target, structure the RM horribly, or the market ultimately decides it is just not interested in this particular RM/story. Just about anything could happen here. Not much I can do about that.

But focusing on the current numbers/valuation, the upside potential from this 5-cent level is pretty hard for me to ignore. Using the full 16M shares as a legacy base number gives ADMG around an $800K legacy valuation at the current 5 cents. There usually is the potential for decent money to be made when you can buy a relatively attractive shell at a legacy valuation under $1M. What makes ADMG even more interesting/attractive to me is the possibility of Eastland selling some or all of his position to the RM target. In that best-case scenario, ADMG's legacy valuation at 5 cents could be under $220K.

Extremely nice potential here if things play out well.