Folks, one thing that everyone needs to consider and not panic over is if the R/M happens here and they change the share structure. This is long and detailed so get ready to dig in..
Let me go over what happened with CTHE (CT Holdings) when it merged with XCRP. I am not saying this is what is going to happen here.
Here were the main points of that reverse merger:
-CTHE shares were reverse split 8.27 to 1.
-CTHE shares Outstanding went from 2,894,675 to 350,000.
-CTHE shareholders now owned 2.4%, or 350,000 shares of the new company XCRP & XCRP private shareholders owned 97.6%, or 14,000,050 shares of the new company.
-Total shares Outstanding of the new company now is around 14.4 million.
Okay, it sounds like you are getting ripped off, only owning 2.4% of the new company? Right? Well let's dig a little deeper into the numbers.
Say you were a CTHE shareholder before the merger and had $10,000 invested at the price of $0.45, the price it was trading at when the merger happened. You would have owned 22,222 shares. Well, they just stuck you with a 8.27 reverse split so now you own 2,687 shares at a share price that, at split adjusted, should now be $3.73.
But wait...
Then the board of XCRP decides that the share value of the new shares should be valued at $98 million, or $7.00 a share based on their Q4 2006 private placement. So guess what, instead of starting to trade at $3.73 (your price), or even $7.00, the stock started trading for $10.00 a share. Your $10,000 investment, though you have less shares, is now worth $26,870.
XCRP started with a market cap of $143 million ($10 x 14.3 million o/s) and pretty much went downhill from there....
Now, what if the same would happen to Palmaz if the merged here? Say your 100,000 shares you bought at .10 were reverse split 10x? You would now have 10,000 shares at presumably a $1.00 right? CWDW shares are now down from 34 million to 3.4 million in the new company and the Palmaz dudes get say 16.6 million shares of the new company with symbol ZZZZ. So it has 20 million shares Outstanding.
So...
What should Palmaz's market cap be? Your $1 (you paid) x 20 million shares outstanding equals a $20 million market cap? Geesh, I would say it should be worth 5x that at least, or $5 per share. Guess what, your 10,000 shares at $1 ($10,000) is now worth $5 ($50,000).
Again, this is all imo as I have no idea what will happen here. All I am saying is even if the fine print looks bad at first, it may not be all that bad. Someone out there will want your shares because they know the real value is a lot higher. If nothing happens to the share structure, it's even more golden..
I am done, sorry...
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