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Mark954 · 2010-09-13T16:20:01.8700000Z

Monday Analysis on RMDM by John Lux Last week I promised to tell you what makes reverse merger stocks move so violently and so fast. Why can you make such huge profits if you find the right stock pre-merger? Most reverse merger shell stocks has market capitalizations of $250,000 - $2 million. The exact value of a reverse merger shell is hard to estimate and varies greatly, but some factors are clearly important. These factors are important because they entice and are valuable to the operating company that is looking to go public by merging with a reverse merger shell. The volume of trading in the stock is important, as it is easier to raise money with more volume in the stock. This is because investors who put money into the company privately are eventually looking to take profits by selling. The more volume, the easier it is to sell. Similarly, the more shareholders in the stock, the more attractive the shell is, for much the same reason. If there are any assets in the shell, naturally that will increase the value of the shell. Now consider a hypothetical reverse merger where the shell has a market value, a market capitalization, of $500,000 and the operating company, when merged in, will have a market value of $10 million. Naturally, the operating company will wind up with most of the stock, let's say 80% of the stock in the combined company. This means that the public shell pre-merger shareholders will now have 20% of a company worth $10.5 million. Twenty percent of $10.5 million is $2.1 million. That means that the shareholders in the reverse merger shell company paid $500,000 for stock that is now worth $2.1 million = more than 400% appreciation gained with the stroke of a pen. This, in a nutshell, is why reverse merger stocks can jump overnight and offer what I consider to be the highest ROI potential of any type of investment out there. If you want to know more, I recommend my "How to Find Hot Reverse Merger Penny Stocks" on Amazon.com. Next week, we will talk about trading patterns in these stocks. Now let's see what we have here today for these Mina Mar reverse merger penny stocks. We all know, naturally, that such stocks are high risk and are to be traded only with your racetrack money, but most of these stocks have relatively low market capitalizations and have announced that they are looking for deals. Typically, their stocks are drifting lower, giving the careful speculator a chance to buy that he will not have when the deal is done. Yes, a stock that has a soft stock price and low volume is boring to many, but as we used to say on Wall Street: "Never go short a dull market." Featured companies ad's are currently running on: The electronic version of the Ticker ad rotates between 3 sites for 6 weeks. It was on WSJ, now it's showing on MW and Barrons. The WSJ print ad is scheduled to start Wed, Sep 13th. WSJ: http://public.wsj.com/public/resources/documents/ads/etearsheet.html?mod=16107 MW: http://www.marketwatch.com/mw2/mod/ad/etearsheet.asp?mod=16107 Barrons: http://online.barrons.com/public/resources/documents/ads/barronsetearsheet.html?mod=16107 In addition featured companies are being advertised on Alpha Trade portals AGIJ Axia Group - AGIJ, a stock that has reverse merger in its corporate DNA, is seeking merger candidates. We know that several potential targeted merger candidates are being courted with revenues and assets of $2-3 million. Not only that, the company has budgeted much cash for an awareness campaign. DTSL DTSL is soft and slow, and we look to the company to continue its expansion by acquiring not other companies, but more clients. The company is shooting for big name clients and we see a future for the company's stock. EEGI EEGI has started to fulfill our expectations for the stock, jumping up 50% in the last week. We still think there is more to go for this stock, although we would not be surprised to see some backing and filling with such a large move without major news. HIRU Hiru is cheap based on fundamentals and has a sizable shareholder base. Therefore, the assets add to the company's value and the shareholder base helps too. We believe that the company should not be selling at these prices. We look to buy cheap, in advance of a planned awareness campaign. HTDS HTDS is showing some small increase in activity and we suspect this could presage a new move in the stock. We anticipate better days for the stock. Go long. NWTT NWTT got cheaper this week - its small market cap make it an even better buy for those looking to profit from an upcoming deal. We recommend you look to buy cheap here. RMDM RMDM has a technology business in China and also is looking for a deal. A strong merger could make the stock move like it did in the last 12 months. SKGO SKGO is looking for deals with a relatively low market cap. Massive updates expected shortly with significant new contract announcements which should by all accounts provide the company a long anticipated lift. Outstanding share reduction expected with the rescission of the China Sanhe Plastic Wood company. Another sleeper. VCTY Just awaiting lawyers review on the merger of China Hydro company with VCTY. VCTY USA based legal counsel just returned from China and VCTY has two agents remaining in China to answer any questions or assist the Hydro merger process. UWRL UWRL is still in Caveat Emptor status and its merger with a China-based gaming company is on hold until Caveat Emptor is gone. Another previously announced merger with Welcome Place, is still out there. Again, UWRL is moving to its support levels, where a buy might be interesting. There has been an uptick in activity which can foreshadow electrifying news in the stock. A speculative buy. ZMGD Another company looking at a potential merger, with an awareness campaign planned. On the chart, the stock is sleeping. Buy and wait for it to wake up.