quote:Originally posted by Upside: originally posted by Will: Yeah, that was me and that's based on CMKX only having 400 billion outstanding and a .035 price for GEMM which is at .031 today.
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Sure, if you don't mind winding up with next to nothing after commission. I'll sell mine, thanks for the 5 bucks Urban! You're a great guy!
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The 1934 Securities Act states that any private company with over 500 public shareholders is a public (reporting) company. In his book, Going Public, Frederick Lipman, an experienced securities attorney, observes that any public company may sponsor a private company by distributing free stock of the private company to their shareholders. The industry refers to a private company that goes public using this stock distribution strategy as a Spinoff.
Why Will Public Companies Sponsor Spinoffs?
The public company sponsor usually gets 10% of the private company's stock. The public company distributes half this stock (5%) to their shareholders. By regularly paying their shareholders Spinoff stock dividends, the public company keeps their shareholders. The public company retains 5% of the private company's stock as a corporate asset. This stock enhances the net worth of the public company. The public company sponsor normally pays the cost of distributing the private company's stock to their shareholders. This makes going public a cost free service for the private company.
Why Should Any Private Company Go Public?
* Doing private placements is easier for a public company. Your company can more easily convert your stock to cash.
* A public company can use its stock to buy corporate assets. By buying cash-producing assets for your company's stock, you increase your company's cashflow, without spending your company's money.
* When it comes time to sell your public company, the sale price will be your company's share price multiplied by the number of issued shares. The share sale price is usually greater than a sale price based on your company's balance sheet.
* Business groups buying recently privatized Foreign Government industries gain substantial insurance against a future Government nationalization by becoming a U.S.Public Company.
How Does a Spinoff Compare With an Initial Public Offering (IPO)?
For an operating company, the average cost of doing an IPO is around $750,000. It takes 18 months. Over half the private companies that decide to go public with an IPO abandon the process before they become a public company.
In a Spinoff, the public company sponsor pays your costs. It takes about four months for your private company to become publicly trading.
If you do an IPO, you're not required to distribute any free stock to the public. However, most IPO underwriters price the IPO stock at 15% below the net worth of the company. This effectively gives the public shareholders 15% of the private company free.
Where Do Spinoffs Trade?
A Spinoff is a public company. It will trade over-the-counter (OTC), if it doesn't qualify to trade on a stock exchange. The public companies that regularly sponsor Spinoffs, usually arrange to have the new public company trade on the NASD Automatic Bulletin Board.
Why Shouldn't a Private Company Do a Spinoff?
* It's rarely cost effective to arrange a PUBLIC financing for a U. S. Public Company. Unless you can arrange a private placement, you must be certain that your broker or consultant has the contacts to fund your Spinoff.
* The sponsoring company usually wants a seat on your Board of Directors. As Mr. Lipman comments, the sponsor can be legally liable for the misdeeds of the Spinoff.
* It's nearly impossible to find a Spinoff sponsor for a concept- company. The potential of legal liability ensures that sponsors want quality operating private companies for this process.
* A public company has a responsibility to its shareholders. As a matter of corporate self-interest, the public company must insure a strong share price. This responsibility adds ongoing costs to any company's operation. Whether your public company trades OTC or on the NYSE, investor relations will be part of your annual expenditures.
Why Aren't Spinoffs Popular?
* Every industry wants to sell products that make their members the most money. The Spinoff saves you money. But, securities attorneys lose income. U. S. brokerage firms make less money doing Private Placement than public offerings. Financial printers lose money, etc. It isn't in the Industries best interest to mention a Spinoff to the CFO of a private company.
* Most OTC company insiders want to dump their stock quickly. The stock in a Spinoff is restricted stock (subject to SEC Rule 144). Since insiders can get free trading stock by buying a Trading Shell, they avoid Spinoffs.
* Few public companies will sponsor Spinoffs because of the legal liability problem.
Spinoffs work, but they may not work for your company. Discuss this business strategy with your attorney & accountant. Seek an opinion from a business consultant or stock broker familiar with Spinoffs. Knowing that Spinoffs exist means you have half your answer about using a Spinoff. ========== Mr Cate (e-mail: money@southcoast.net) has been a business and equity finance consultant for various public & private companies and individual investors since '81, edits & publishes Investor Alert, and offers the Equity Financing Workshop for private companies seeking to go public.
----- Brought to you by - The 'Lectric Law Library The Net's Finest Legal Resource For Legal Pros & Laypeople Alike. http://www.lectlaw.com
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Since many are talking about leaving this thread I would like to say that I find the DD here informative and for the most part entertaining. I don't add much in the way of facts or banter but like to lurk. Thanks again.
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So not many longs answered the question. Thanks to those who answered. My answer/strategy is pretty much same like Upside. I am holding my 8M because I think (hope??) it will have another run some day.
quote:Originally posted by TruthTeller: Question for CMKX longs:
What'd you do if you don't get UCAD divy next week or if its pushed back again? Would you sell?
Didn't even see the question, but since you pointed it out...
I'd probably not sell. I don't have a lot of cash invested. My pps is about .00015, so if it tanks back to .0001 I'm out about a grand. Would I be concerned? Absolutely. I've been through something similar with GMDP.
What I think is going on with CMKX is management spending way too much time wheeling and dealing and way too little effort looking for diamonds. I think eventually CMKX will be reverse merged with some other company (which will turn out to be an effective reverse split) and the process will continue. The only thing is can some of us "little guys" manage to make some money on all this. Some will but most of us won't because we believe in "the dream" of getting fantastically rich on this and will get caught when the stock "resets".
Sorry to be a cynic. And I'm not bashing, just stating what I think is going on. For what it's worth I plan on holding for the dream (yeah, I'm probably being foolish on this). But just like the lottery, you know deep down your probably going to loose but you get a lot of pleasure know you at least have a chance to get filthy rich and it's fun to imagine the "what ifs".
------------------ ~,-,-< GatorMan
[edited to correct spelling mistakes]
[This message has been edited by GatorMan (edited October 01, 2004).]
quote:Originally posted by TruthTeller: Question for CMKX longs:
What'd you do if you don't get UCAD divy next week or if its pushed back again? Would you sell?
The UCAD divvy's: they don't mean a thing 'cause they ain't got that swing...like DIAMONDS!! SGGM, CIM, GEMM, AMFM, ACDC, LSMFT, NASA...just letters on a slow scrolling page. Since you asked I'll either sell or lose the whole lot when I find out there no DIAMONDS!! Absolutely NOTHING here to get worked up about. 4 MIL at '2 & '3, not much to lose, but a considerable gain if... The long shot has always been the sentimental favorite. Too many chefs watching this pot and they don't even have the main ingredient...DIAMONDS!! Another problem on this thread: failure to communicate i.e. intellectual failures attempting to communicate. All up in the Kool Aid and don't even know the flavor. MPO
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Ok maybe there isn't a divdend on sggm ,but I read that they payed 200,000,000,000 shares of their stock along with 10 million dollars to get a piece of cmkx and I don't know where that loot is going
quote:Originally posted by will: There are so many dividends I can't keep track. Was there a dividend announced for SGGM? I don't recall a dividend, I know of three, UCAD, CIM, and GEMM.
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I wish they would find uranium, theres a legitimate shortage of that in the world right now.
quote:Originally posted by Justhis1ce: The UCAD divvy's: they don't mean a thing 'cause they ain't got that swing...like DIAMONDS!! SGGM, CIM, GEMM, AMFM, ACDC, LSMFT, NASA...just letters on a slow scrolling page. Since you asked I'll either sell or lose the whole lot when I find out there no DIAMONDS!! Absolutely NOTHING here to get worked up about. 4 MIL at '2 & '3, not much to lose, but a considerable gain if... The long shot has always been the sentimental favorite. Too many chefs watching this pot and they don't even have the main ingredient...DIAMONDS!! Another problem on this thread: failure to communicate i.e. intellectual failures attempting to communicate. All up in the Kool Aid and don't even know the flavor. MPO
quote:Originally posted by DIGDOUGH: Ok maybe there isn't a divdend on sggm ,but I read that they payed 200,000,000,000 shares of their stock along with 10 million dollars to get a piece of cmkx and I don't know where that loot is going
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NEW BUSINESS: Our Profile List stock St. George Metals, Inc. (OTCBB: SGGM 0.01 x 0.02) issued a Press Release announcing that the Company has finalized a joint venture agreement where St. George Metals, Inc. (Pink Sheets:SGGM) will purchase a 5% unencumbered and absolute interest in any and all mineral claims held by CMKM Diamonds, Inc. in consideration for $10,000,000 US Dollars and two hundred billion (200,000,000,000) restricted shares of SGGM.
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I dont follow this stock nor do I personally like it But this looked interesting to those that are invested in it and wanted to show what I came across even if it is behind everyone else. I just thought I would share it not that it is rocket science or that anyone didnt already know.
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gator man---i'm with you on that one. race cars like "notfunny cars". i used to race drag cars in my youth. from what i have seen of their drag machines i know they have some major jack tied up in them and wonder why that money didn't go into a good drill rig.
i have been following this stock for so long, i think their real calling is a tv mini series. best plot i've seen in years.
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Sorry... Looks like I jumped the gun. I called SEC and gave them the CIK number that I pulled up and she said that the latest filings were from Jul 2003 for Casavant mining kimberlite international. Forgive me.
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Just got this reply from Ameritrade:. If this is old news, sorry - I can't keep this stuff straight anymore.
Thank you for contacting us today concerning CIM.
Preliminary information has indicated that the payable date for the CIM spin-off shares has been pushed back to 10/18/04. You may contact the company directly for more information.
If you have further concerns or inquiries, please reply to this message.
Sincerely,
Rebecca Henson Apex Client Services, Ameritrade Division of Ameritrade, Inc.
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Earth-shaker That was posted back on the 7th. It may have been posted more than once. Old news is not too scary especially coming from stock patrol.
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ppl speculating on uranium..ya think maybe shore gold or debeers might have found uranium too since the place we are now drilling is right between both them?? the only thing cmkx will find is diamonds. if shore or debeers found uranium we would know it. as for finding it in some of the other claims we have?? well they have drilled 2 - 2 1/2" holes in 2 places in 1 yr with 100 anomolies at the rate they are moving 200 yrs from now we might know. i still believe we will be rewarded for holding long term but for the thousands of shareholders with a few million shares we won't be buying any new cars with the reward.
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That number (9,999,999) does not have to be considered unusual. Choice Trade allows trades up to 10,000,000 minus 1 share. So, they could be from someone with either that or a similar account.
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