Videolocity International Inc (VCTY)

[EDWARD STEVENSON]

A good read regarding Reverse-Mergers:

The Anatomy of an OTC Reverse Merger

In our last issue, titled: “The Pre-Merger Run-up: Where you can cut yourself a piece of the profits”, we introduced readers to the reverse merger process. We briefly discussed the principle purpose to ‘shell’ stocks and where investors can capitalize on investment. In this issue we will break down the seemingly-intimidating and at-times-complicated reverse merger cycle into four (4) basic stages. This will give every investor the opportunity and knowledge to recognize these explosive trends when they appear in the market.

Stage 1: Early Bird Special

A ‘shell’ stock with little to no market activity is aroused by a jump in volume. The volume primarily originates from (i) those with ‘inside’ knowledge and (ii) savvy investors speculating that a merger may be on the horizon. During this stage, ‘accumulation’ of stock in the marketplace by one, or both of the aforementioned parties, is common. Unusual volume activity, in a given market, is a signal that favorable corporate activity may be taking place. The favorable event, relative to reverse-mergers, is that management may have found a suitor for the shell.

Stage 2: Let the games begin!

For any number of reasons, management believes it is important to inform shareholders that they are diligently working towards drawing a prospective merger candidate. “Merger Candidate” is used universally at this stage to entice potential investors. Generating market activity at a preliminary stage is often required to fulfill a binding agreement or public stock offering. This stage does not necessarily exist with every reverse merger. Often, stage two (2) of the reverse merger cycle, as defined by TimelessWealth.net, is coupled with stage three (3). This stage is identified when a corporate update is issued containing the term ‘merger’ or ‘merger candidate’ or (ii) when the context of a corporate press release is suggestive of merger activity.

Stage 3: Speculation Nation

This stage may encompass Stage Two (2) of the reverse merger cycle. In this stage...continue reading: http://timelesswealth.net/penny-stock-articles/anatomy-OTC-Reverse-Merger.html