Replies to post #74186 on Flexpower Inc. (FLXP)

[brian]

the float is about 6b and the o/s is probably 11b now.. thats 5b shares that they could place, since they didnt buyany companies that they were supposed to buy.

[trepid]

As I understand it the Chinese co has to get control of EFGO one way or another. There are insiders and institutions that have shares that the Chinese co could buy from. What we see traded is just the float. The more I think about it though, they need those preferred shares because of their voting rights.

Here's the definition for a Reverse Takeover from Investopedia. I believe an RTO is the same as a R/M.

http://www.investopedia.com/terms/r/reversetakeover.asp

A type of merger used by private companies to become publicly traded without resorting to an initial public offering. Initially, the private company buys enough shares to control a publicly traded company. At this point, the private company's shareholder uses their shares in the private company to exchange for shares in the public company. At this point, the private company has effectively become a publicly traded one.

A reverse takeover can also refer to situation where a smaller company acquires a larger company.

With this type of merger, the private company does not need to pay the expensive fees associated with arranging an initial public offering. The problem, however, is the company does not acquired any additional funds through the merger and it must have enough funds to complete the transaction on its own.

[kermit42]

The mechanics are pretty simple. If there is to be a RM, there will first be an RS, probably 1,000:1.

That will leave about 10 million shares in the OS. The stock opens around 6 or 7 cents (.00006 or .00007 in current pricing, count the zeros). The company issues restircted shares to the Chinese company for the purchase (let's say 100 million) at some agreed upon value and sells another 40 million into the float for hard currency and the price drops to 1 cent or a little less.

Viola, we have a medium float stock valued at about a penny a share (.00001 pre-split). 100 million restricted and 50 million in the tradable float.

When the RM is announced, the stock goes on a big run to 10 cents or so, the MOMO boys make out big, and the faithful longs lose their shirts. Just like it always happens in the pinks.