mypointz
The PR about the financial events in the GFCI/CTBG stated that there would be a spinoff/dividend of CTBG shares for owners of GFCI "once the registration becomes effective" of those shares that were suggested, and there was a number given of about 75 million shares to be newly registered
I don't have the PR up in front of me and am going on memory so if my numbers aren't quite right, please don't yell liar liar pants of fire at me, ok?
back to my point
there are currently much less shares outstanding for the coil tubing company than there are now, I believe it's like 10 million. Well given a share price of .7 or so, gives you a total market cap of about 7 million dollars.
Once those shares are registered there will be another 75 million shares to divide into the total market cap, so therefore each share will be worth substantially less.
Theories abound why people are buying CTBG which I won't get into, but I believe that the longs are hoping that with financial news and possibly a jump onto a national market, that the market cap of CTBG willl quickly catapult back to the 70 cents per share value, about 50 Million (85 MM sh times .7/sh) but I have never seen a company go from 7 million to 50+ million on one filing, so it would likely be a first.
we'll see
but, and this is my point, buying CTBG here would be very foolish IMO. You'll get free shares* just from owning GFCI (supposedly) so why buy them on the OM at a very inflated price?
*Free shares is kind of a misnomer, your stake in GFCI will reduce by exactly the amount the market values the dividend. If the market values GFCI at let's say .4 and they give you two shares of CTBG and the market values them at .1 each, then GFCI will open at .2 the day that GFCI goes ex-div.
