Nashville Records, Inc. (NRCD)

[Brookwinn]

The share structure picture is very interesting. As you have pointed out, people associated with the company (I would call them "insiders" whether they are all technically so or not) control 200M shares out of the 250M OS - that is a solid 80%!! The Company would like to purchase another 18.3M more, which would give the insider group 218.3M out of 250M - fully 87% of the shares. Since the "insiders" obviously have a desire to acquire more shares, I am thinking that they could also be taking advantage of the "fire sale pricing" these days and could be increasing their insider position significantly at these low costs, in addition to the deal pending with Munro....by the time this is done, the % of shares held by "outsiders" will likely be less than 10%...could perhaps even be as low as 5%. I wonder what the target % ownership is for the insider group.

As I think about that, I wonder how that impacts the value of my holdings in the future. The company has plans to make money - if the rewards go to the shareholders (especially since they own most of the shares) -- sounds like there is a good chance of getting in on the rewards. [The other way insiders can reward themselves is through management fees and bonuses, bypassing the shareholders, but in this case I think they would choose to do dividends since they still will get almost all of it for themselves, and dividends have more favorable tax treatment (correct me if this is not so in the USA - in Canada it is that way)].

I also wonder how liquid the market would be for NSHV shares when the insider group (a limited number of people) may end up controlling 90-95% of the shares. I expect the share price could go quite high if the company does well and there are so few shares available on an open-trading basis. Perhaps I am wrong and that the small number of shareholders would stifle market interest....any thoughts on this?

I am sitting here thinking that this sounds almost too good to be true...opportunity to own a significant part of a company with great prospects (e.g. my 2 million shares could represent approx 15 - 20% of the "non-insider share count" based on assumptions above). Right now it looks like there should be a very limited number of shares available, but they are at dirt cheap prices! Maybe I should grab some more on Monday.

Any further thoughts on these "weekend reflections"?

Lion