Float vs Sink
The more I'm seeing what is posted on other boards, I'm convinced for thousnads of people this is the first stock investment they've ever made. This holds for even those that are very sharp and many people follow.
That isn't a knock at all. It's good that people explore investment opportunities. But I wake to find are less concerned about the SERIOUS ISSUES which may sink CMKX than they are about 3 words that GB posts and somehow surmises this determines the float.
Growing the company and improving share structure are important, but as the following of this company and certainly posters have done in the past, their expectations are in the orion of space. The posts that feed this continue to be NOT related to real valuation models, real prototcol on how the market works, or simply wrong on facts.
George is sharp. But I sit and see a young man with so much passion for DD and analysis and I'm thinking why doesn't this guy use his energy on finding REAL undervalued stock plays? He would be sensational at it and only get better over time. Others I've seen fit this bill too. It's their choice, I understand that, but it's tiring to see literally thousands looking, paging through and agreeing with three words GB posted, "small business issuer" and thinking the float is 125 billion because of this.
I will copy what GB posted that everyone is holding their breath on:
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"General
Reg. §228.10 (Item 10).
(a) Application of Regulation S-B. Regulation S-B is the source of disclosure requirements for "small business issuer" filings under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").
(1) Definition of small business issuer. A small business issuer is defined as a company that meets all of the following criteria:
(i) has revenues of less than $25,000,000;
(ii) is a U.S. or Canadian issuer;
(iii) is not an investment company; and
(iv) if a majority owned subsidiary, the parent corporation is also a small business issuer.
Provided however, that an entity is not a small business issuer if it has a public float (the aggregate market value of the issuer's outstanding securities held by non-affiliates) of $25,000,000 or more."
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There is SO MUCH MORE included in the language of Regulation SB. Here is just part of it that he didn't include:
"NOTE:The public float of a reporting company shall be computed by use of the price at which the stock was last sold, or the average of the bid and asked prices of such stock, on a date within 60 days prior to the end of its most recent fiscal year. The public float of a company filing an initial registration statement under the Exchange Act shall be determined as of a date within 60 days of the date the registration statement is filed. In the case of an initial public offering of securities, public float shall be computed on the basis of the number of shares outstanding prior to the offering and the estimated public offering price of the securities."
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The he assumed the float is calculated as follows:
25,000,000/.0002 = 125,000,000 Float
Huh?
Where anywhere is the calculation of the float determined by taking the maximum revenue figure stated by Regulation SB and divide it by the ask?
Where anywhere can you determine the float by taking ACTUAL revenue and divide it by the ask (or average of the bid/ask)?
Further, in this erroneous formula (which again has no market/mathmatic/algorythmic/sensible basis) he assumed automatically CMKX has $25,000,000 in annual revenue. For them to be a small business issuer, they have to have LESS than this, up to a maximum of $25,000,000. I'd bet a bottom dollar their revenue during the period of time in question AND/OR now is less than $25,000,000 annually. So applying his formula, does that mean the float is 100B?? 40B??
None of the post erases the o/s level at 703 billion shares, and that the SEC is serious as a heart attack about investigating and making a determination on CMKX.
I understand if many are trying to gleen positives now. But they will come if CMKX emerges from this in tact and with the old leadership ousted and Mr. Maheu in charge. Then we can talk about value and the float until we're blue in the face.
For now, instead of many holding hopes on erroneous formulas about the float we should be focused on questioning the company on whether they are soon to sink via a SEC judge. Euthydemus made an EXCELLENT post yesterday concerning his contact with Pinksheets that we cannot ignore.
We have to get through this. It will be very tough, but doable with the right leadership and counsel stradegy. We have to not sink before we 'float'.
Bo
