InvestorsHub Logo
Followers 0
Posts 12626
Boards Moderated 2
Alias Born 04/05/2006

Re: GorillaGorilla post# 2474

Wednesday, 02/24/2010 2:39:26 PM

Wednesday, February 24, 2010 2:39:26 PM

Post# of 163716
Since nobody ever bothers to contact me to ask these questions, I will state them once and for all for the record. I do not wish to make it a habit using this forum, in fact I do not like doing so at all. However, if accurate information is not provided, this discussion will turn into the typical message board conspiracy theories.

The Company falls under the "shell provision" of Rule 144(i) in that post merger shares are ineligible for resale without a underlying registration statement or Form 10 filing, of which the Company is working to accomplish.

Resource: http://www.thelebrechtgroup.com/index.php/publications/tlg-publications/97-rule-144s-impact-on-shell-companies

Previously shares were issued to both consultants, service providers and promoters. As of 2/17/2010 there were 54,806,016 shares issued and outstanding. The restricted amount is 39,659,659 shares. The restricted amount are the shares that fall under the Rule 144(i)inclusion. This still leaves over 12M free trading shares.

What individuals are witnessing, is the re-distribution of some of these free trading shares. Now that the liquidity has improved in the stock, some of these individuals are deciding to sell. This is however not the result of newly issued shares hitting the market, but shares previously issued to past consultants and service providers which have met the required holding periods under Rule 144 for re-sale. To assume that every consultant who was issued stock has the desire to become a long term investor might be a bit over enthusiastic at best.

This process of redistribution however is not a negative for long shareholders, but is actually a positive. In the last few months, the shareholder base has grown from a little over 300 accounts, to over 1,000 accounts. The re-distribution has also increased the current tradeable float which has helped increase liquidity for investors. At one time the stock barely traded $10,000 a day and now it trades $100,000 a day. These are all positives for the Company moving forward. For a stock to have a robust and healthy market, it must first have a large and robust shareholder base.

Over time, as the Company is able to increase transparency and attract a broader range of investor sophistication, these current market woes will not be as much an issue. Increased interest and liquidity, along with continued shareholder growth will allow the Company to reach a relative value based on it's reported growth.

Please do not respond to this post for questions. There are proper channels to do such. I just want to squash any rumor or conspiracy theories right off the bat before they get out of hand.. as they tend to do on message boards.

Visit our #board-9884 and come make $$money$$ with us by trading and investing in Emerging Chinese Small Caps!

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.