thanks Grande. I try to be as analytical as possible, but sometimes i get steamed at the obvious misinformation that some posters try to get away with. let me try to answer your questions as best i can. let me preface this by saying that while i have been a financial professional, my licenses lapsed a long time ago and my brain is not what it used to be, but i will answer to the best of my abilities.
Controlling interest in companies...there really is no "typical" percentage. In the penny stock world, we typically see an individual who owns 51+% of the stock and makes sure that no matter what happens to the AS and OS, he keeps his controlling percentage. With larger companies with huge floats and huge market caps, someone with 5% of the OS can call the shots.
As far as current share structure goes, if there is 18% held in treasury, those shares SHOULD be considered "deleted" if you will. Companies, like insiders, cannot actively trade in their own stocks for their own benefit. Once a company buys stock back in the open market, or cancels a private placement transaction, typically those shares are considered nonexistent and reissuance would require another placement process. in other words, if the company buys shares, they buy them to retire them. if they want to resell them, they need to "recreate" them. they arent just sitting in the company safe. by buying 18% of the OS the company has effectively reduced the OS by 18%.
Part two: with regards to an exit strategy my thoughts are this--If I owned a private brick-and-mortar business I could probably list it with a business broker and sell it for .5 to 1.5 times sales, depending on a lot of different factors. it would probably also take 2 to 5 years to find the right interested party, complete DD, and close the sale.
OR
I could buy a publicly trade shell for about $600,000 and "sell" my business to the shell. In return I would get an ownership percentage in the shell (perhaps as high as 80%) while paying some of the parties involved some cash or some stock. If I didnt know what I was doing (or didnt have the cash) and had to hire someone to take care of the details for me, I might end up with 30-40% of the stock in the "new" company.
The difference is this: because of liquidity, public companies are "worth" more than private ones. while my business might have been worth 1 times sales in a private transaction, as a public company it might be worth more like 5-10x sales. the downside is i would have been required by law to hold my shares for 24 months and then only sell them into the market slowly OR negotiate a private transaction or secondary offering to dispose of them.
My guess is that the suljas wanted to sell their business but they didnt want to settle for a low price and take 5 years to do it. in walks some guy in black who says "i gotta friend in texas that can help" and the LFWK reverse merger happened. From reading the available documents, it seems that the suljas, devries and petar dumped their shares through these nominee accounts instantly instead of waiting the 24 months. the share price we enjoy now is the result of that.
all imho, of course
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