Replies to post #17431 on Zeons Corporation (ZEON)

[king oil]

I'm not sure if the calculation is right

I think the USSE and ONYI prices have to change until USSE price is 1.3 times that of ONYI.

Let's call the new company symbol COMBO

if you want 1 share of COMBO, you can buy 1 share of ONYI, or .77 shares of USSE. If you buy 1 share of USSE, you will get 1.3 shares of COMBO, so USSE shares should cost more than ONYI shares.

for example, if ONYI trades at 50 cents, USSE should trade at 1.3(50) = 65 cents. Since we don't know the value of COMBO, there's no way of knowing what USSE or ONYI should trade at today. If we take the recent PR's as a guide, then COMBO should trade at $12 per share. That means that ONYI should trade at $12.00 (since 1 ONYI = 1 COMBO) and USSE should trade at $15.60 (since 1 USSE = 1.3 COMBO).

[PaperProphet]

Bball, look at the relative sizes of the two companies based on their market cap. Why would you think that the market cap of USSE would rise up to meet the share price of ONYI?? Hypothetically if ONYI had only ten shares at a share price of $130.00, do you think after a reverse merger which consisted of giving USSE shareholders 1.3 new shares of ONYI for each 1 share of USSE they own, that USSE's price would rise up to $100.00 per share?

To value a real merger (although I don't know to what extent I would consider USSE a real company) you look at the combined entity and the total number of shares after the merger. You then divide the total 'value' by the number of shares. I.e. Add the market caps of USSE and ONYI then divide by the total shares after the merger. Total shares are 1.3*USSE's share count + ONYI's share count.

If you feel there are synergies, you can add the value of the synergies to the equation. Apparently the company wants shareholders to believe that there are $12 billion worth of synergies--maybe if USSE had pulled a much higher baseless number out of their butts, shareholders would have been even more optimistic.