hot penny stocks to watch
Post on 01-Nov-2014
1.284 Views
Preview:
DESCRIPTION
TRANSCRIPT
Hottest Penny Stocks – Part II
Hot Penny Stocks to
Watch
Disclaimer
� Stock speculation is very risky
� Do not trade with more than you can afford to
lose.
� Seek professional investment advice.
� This is not investment advice.
� No warranties, you are on your own.
� This is not suitable for all investors
Penny Stocks to Watch
� My favorite type of penny stocks to watch are the
public shells that can be used for reverse mergers
� A reverse merger is when a private operating
company is acquired by a shell (non-operating)
public comapany.
� This is done so the private company can go public
fast.
Reverse Merger Price Jumps
� With the merger, the shell may go from a small
market value to a large market value in a few
months
� For example, the shell may have a market value of
from $100,000 to $500,000
� The shell shareholders get to keep usually 5-20%
of the new merged company
� The merged company may be worth millions
Hypothetical Jump in Value
� Do the math, if the shell was worth $100,000
� The operating company is worth $10 million
� Then the value of the merged company should be
more than $10 million
� So if the shell shareholders keep 5% of the total
new, merged company, they have stock worth
$500,000 or five times their original investment
Reverse Merger Example(chart courtesy of Stockcharts.com)
RMDM
� RMDM was a speculative, sub-penny stock that
took off after a reverse merger
� Huge profits were made by the original holders
� Note that it went right back down again
For more such stocks see my YouTube video
“Hottest Penny Stocks Part I”
RISKY!
� While large gains can be made by sophisticated
players in these stocks, they are very risky
� Most OTC shells will not merge in a given year
� They have little or no public information and
what is there may be incomplete, misleading or
even deliberately false.
� Merger stocks tend to rise and fall FAST!
� Never risk a lot of money in them
Where to find them
� Reverse merger shells are found in the Pink
Sheets and on the OTC Bulletin Board
� Pink Sheet shells may not be providing public
information
� There is no subsitute here for educated, tedious
research
� Experience and knowledge can pay large
dividends here – ignorance is expensive
Learn More
� Subscribe to my YouTube videos
� Subscribe to my blog
www. investing-performance.com
Read My Book on Amazon.com
� How to Pick Hot
Reverse Merger Penny
Stocks
John Lux
� Trader, investment banker, former
OTC Market Maker and attorney
Lux.Investor@ gmail.com
Copyright ©John Lux 2011
top related