ShellStockReview.com

Shell Stock Review Logo

What is Wall Street's best kept secret?

          Shell Stocks!

 

Member Login

Forum - Latest Posts

  • No posts to display.

 

There are several considerations to review when valuing a Shell Stock:

MAJOR CONSIDERATIONS

  • Verified Shell Stock Looking For An Acquisition: it should be actively looking for a reverse merger.  Verification can come from SEC reports, news releases, or verbally from company management.
  • Experienced Management: management must understand the mechanics of a reverse merger and know a good business opportunity.  If management is not experienced, it is imperative they are working with an experienced consultant.
  • SEC Reporting: it must report regularly to the SEC.  This is known as a "reporting company."  We want to be able to verify information about the company from public/legal filings . . . not by word of mouth or rumor.  Believe it or not, there are public companies that are non-reporting.
  • Clean: it has little or no debt, no pending law suites, and little or no outstanding convertible securities (preferred stock or warrants).  We don't want anything that can complicate the reverse merger.
  • Small Number Of Outstanding Shares: the smaller the number of outstanding shares, the better.  A smaller number of outstanding shares lessens the chance of a Reverse Stock Split.  A Reverse Stock Split can lessen the chance of price appreciation.
  • Low Market Value: basically, this is the buy low sell high rule.  A Shell Stock with a low Market Value will have a greater chance of price appreciation than one with a high Market Value.  (Market Value = price X shares outstanding).  NOTE: the Profile List by Market Value sorts the Shell Companies from low to high Market Value.
  • Cash On Hand: some Shell Companies have cash remaining from their previous business endeavors.  Having cash to fund the new company's business plan will attract high quality candidates.

 

MINOR CONSIDERATIONS

  • Tax Loss Carry Forward: the new company can offset future net income with the Shell Stock's Tax Loss Carry Forward (but may be limited in amount due to IRS change of control stipulations).
  • Exchange Listed: it is better for the Shell Stock to be listed on a stock exchange (NYSE, AMSE, NASDAQ, OTCBB).  But, there are some quality Shell Companies that are trading on the Pink Sheets.

 

INDICATORS OF A POSIBLE REVERSE MERGER

  • Increased Volume/Price: increased volume and price with no news may be an indicator of a potential reverse merger.  Information on a reverse merger sometimes leaks out and insiders/family/friends start buying before the reverse merger is announced.
  • Corporate Activity: cleaning up debts, law suits, and issuing reverse splits can indicate management is getting the shell company ready for a reverse merger.