some math that doesn't add up.. ? =)
okay.. prior to the split.. if you take out the runup on the 100-share blocks (the fact that it was able to do so actually helps prove my point later) .. DTIC was about a penny.
for the sake of argument and trying to be *very* conservative, let's assume that it was a rather expensive shell for some reason, to the tune of a $2M market cap (most shells trade for well under $1M.. less on the pinksheets for sure!)
that means that under a super-conservative guesstimate, valuing the DTIC shell at $2M at $.01 - it had 200,000,000 shares outstanding.
post a 1,000:1 reverse you'd have 200,000 shares outstanding. then presuming the merger resulted in rockbands controlling 95% of the stock (typical), you'd need to issue an amount of stock so that 200,000 shares is now 5% of the company.
200,000 x 95 = 19,000,000 shares added
post-split OS if DTIC had 200M out and rockbands now controls 95% of the stock = 19,200,000
market cap @ $.50 per share = $9,600,000 .. believable enough for a new pinksheet that will probably be promoted, right? after all.. CNEX soared to nearly $500,000,000 and it was some junk pinksheet mining company!
here's my problem with the scenario, though.. how does a shell with 200M OS fly from a few cents to $.30 on 100-share blocks? surely you'd have a MM *parked* at a dime happy to sell millions in worthless paper at an aggregate price tag of $20M. they were bailing left and right though, acting as if there truly wasnt a whole lot of stock available..
i think a more reasonable estimate is that DTIC was somewhere in the arena of a forgettable $500K cap - maybe 50M outstanding. after the split that drops to 50K and then you issue about 4.8M shares to rockbands to end up with about 5M outstanding.
at $.50 you're then aiming for a $2.5M cap during the opening trading of a new pinksheet with an above average story.. revenues.. and, according to the rockbands website, a top-notch PR firm pushing their product .. which has caught on in no less than a YEAR with hoards of major celebrities?
at $.50 you're purposely pricing yourself into the 'penny stock' arena from day ONE? i dont know about that. the product is legitimate, from everything we can tell. surprise that they wouldnt at least attempt to show a strong opening in the multi-dollar ranges.
that just seems like a $.50 open is setting the bar really, really low. let's face it -- there is so much junk out there in the pinksheet world that i dont see why something with a relatively tight float, high visibility, and high legitimacy factor not being given, at least early on, a fairly decent market cap?
and finally -- what's with those 200 shares @ $15? that's a decent enough chunk of change that i can't just believe someone is fooling around with the stock.
sorry for the rant.. but i still dont understand how there can be an expectation of $.50 given what the (admittedly early) bids look like right now AND the very large split.
i just dont think DTIC could have been that bloated based on how it traded on those 100 blocks!
i know i'm a pain. forgive me.. but i was honestly perplexed by your post and was just trying to make sense of how we'd end up at $.50 right off the bat instead of something more like the $3, 8, or $11 bids we've been seeing.
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