SMXT: Plans Reverse Merger with CollegeTonight.com
Networking sites have become extremely popular over the past few years. While younger consumers groups have begun an ever increasing thirst of knowledge of technology, software, and the internet, the popularity of these sites have blossomed causing the business world to take notice.
With News Corp’s acquisition of Myspace.com nearly two years ago, the expansion in the number of these sites increased with founders looking to hit it big. Wikipedia has over 100 different social networking sites listed encompassing the globe and ranging from subject groupings from book lovers to gothic industrial culture. Though the number of different sites that focus on the building and verifying of online social networks for communities of people who share interests and activities is much larger than the 100 listed, the entire group is easily dwarfed by the two behemoths in Myspace and facebook.
facebook, which has been in the media limelight over the past few months because of speculation regarding the company’s pursuit in becoming public, founder, Mark Zuckerberg being sued by ex-classmates claiming he stole their idea, and recently having its back end code published on the web, is the second largest social networking site.
The site also has received some flack regarding the qualifications to become a member. In the beginning, it was only open to users with an .edu email address which verified their status as college students. The site then expanded to high schools and now is open to everyone much to the delight of advertisers but to the dismay of students who liked the exclusive site.
Many responded by noting that even though Myspace was loud and allowed for individuality, its non exclusiveness was what turned many college students off and onto facebook. Since facebook has all but abandoned their original niche, other sites have decided to focus on this somewhat neglected area.
One name that is expected to enter the small cap space is CollegeTonight.com. The student exclusive network will provide information about parties, concerts, social events, and have the ability to download contact information into handsets. The site was recently named in a piece by Business Week regarding facebook’s struggles as of late.
Simex Technologies (SMXT), a shell company, announced during Tuesday’s session that it had entered into a Letter of Intent to acquire College Tonight, Inc. in a reverse merger.
The proposed merger is subject to numerous conditions precedent, and will involve a change in stockholder control of SMXT, change of management, change of corporate name, change of corporate headquarters and other significant matters. The proposed merger was expected to also involve a 1:4 reverse stock split of the current outstanding shares of SMXT with closing in 60 days or less.
Very attentive traders became aware of the announcement as shares saw an almost absurd gain on volume exceeding 6.7M. On Wednesday shares saw a pullback losing some 30% on 600K shares traded.
The speculative nature of trading in the name has many thinking that the next facebook is here and is public in the small cap space, but without any other information about the CollegeTonight site besides a 9 month nightlife tour across various college campuses to promote the site, investors would be wise to only invest money that they can afford to lose. But with some large sponsors, Subaru and CBS are noted to have signed on for the tour, the name is at least something to follow over the coming months.
