Posted by: turbosig Date: Saturday, August 02, 2008 10:16:12 PM
In reply to: eelfland who wrote msg# 19530 Post # of 20077
Ellfland - Here are some figures
You bring up very noteworthy comments, in fact, I must say in the bigger picture I agree with you wholeheartedly on the fact that quite a number of pinks are scams. I would also agree that no one should ever risk more than they can afford to lose COMPLETELY playing the pinks because it's just to damn risky out there no matter how optimistic you are (usually that is where you get burned anyway, and the first time it happens, boy does it hurt).
That all being said, BIHC is in a unique position. Do we have ALL the facts? Do we know the buyer? Do we know the exact terms? Nope, we don't know most of this, but we do have the edge on a few fronts. All the PR's to date have been factual (as far as we know) but what really strikes as a positive note is that there haven't been any LIES. The fact that there have been no PR's since the purchase is extremely promising.
Take this scenario:
BIHC buys Barons (just this April) for a few million dollars and we are all quite certain Barons is profitable (regardless of how profitable).
Now since the acquisition, Barons has received many installation deals, Mets, food chains, the list goes on so no point in listing them all.
Now if the former owners received Millions of dollars, that's great (upfront $$$), but they must have known after 26 years in business the future value of cash flows - right? Also if they did receive any stock from the purchase that stock would certainly be restricted for probably a year at least, so pumping it up after 3 months isn't gonna do them any good. Even if it were a pump, the value of 65 million shares at .04 cents is only 2.6 million. That would be a pretty bad pump only 2.6 million for any asset they paid millions for??? (and since the asset purchase was a taxable event, the taxes on even 50M shares at the time would have been a measly $22k)
Now in the original transaction, the former owners got paid cash in an asset purchase and probably received some restricted stock of BIHC. Now Barons is being sold for $16 million roughly, this isn't hard to see that the former owners were wise. instead of taking a $16M (or less) payout upfront and paying a hefty tax, here they get a few million up front, become shareholders of their own former company, collect a dividend and only pay 15%, still hold their shares and move onto a possible future merger or reverse merger all without having to do anything.
Also as far as the div goes, what else is a shell going to do? Retained earnings? For what? With $16M cash in an asset purchase dividend is a great idea, at 7-9 cents it pays the holders of the restricted stock over $4.5M @ .15% and a little over $1.75M to shareholders on record. This will still leave roughly $10M or so in cash - what the heck does an empty shell do with CASH? Nothing except look for a new merger or asset purchase and if this asset sale and divy puts BIHC on the map then other companies looking for a successful shell or acquisition will flock.
DO THE MATH:
If at the time the former owners could have got $12M that would be ~$8M after taxes, etc.
Now they way this went down - (assumes they hold 50M restricted)
Sold Barons for say $3M (profit of ~$2M), take a cash div of .09 (~$4M), they may still have stock worth ~$5M and working capital of $10M to do it again - You call that a scam? They have more networth now than with a straight sale and get to do it all again..
Is it a scam? who knows, but if it is they did everything WRONG. If it's legit, they did everything RIGHT.
-Turbo
P.S. Sorry for the rant
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