Shell Stocks - Rising Stars

[bojomojo]

Shell stocks are becoming very popular nowadays, for you who doesnt know that shell stocks are: Shell Stocks are publicly traded corporations, all that exists of the original company is its corporate shell structure. The company should have no assets or liabilities, a public company that no longer has any business and just retains capital structure and reporting status. Many private companies like to reverse merge with a Shell and become public themselves. Since the public company changes it's name to reflect the private, this merger gives us the reverse situation, thus the term "reverse merger"

A Reverse Merger is a technique that allows a private company to become an instant public company. This alternative method for completing an IPO (Initial Public Offering) is the catalyst that makes the price of a Shell Stock explode!

There are two types of Shell Stock. Reporting and Non-Reporting. Reporting reports quarterly to the SEC. They are audited annually. Non-Reporting forgo any reporting at all to the SEC. Keep this in mind. The SEC will always inform you about the doings of a Reporting Stock. On a Non-Reporting Stock you can only go by the amount of information that is given by the company.

It is so tempting as it is very cheap to start investing in it, and actually the easiest kind of stocks to deal with if you study it.

Here is an example of some Shells:
BDEV SEC Fillings (http://www.sec.gov/cgi-bin/browse-edgar?CIK=0001136331&action=getcompany)
TGFN SEC Fillings (http://www.sec.gov/cgi-bin/browse-edgar?company=TGFIN+HOLDINGS+&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany)
COFI SEC Fillings (http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001201135&owner=include&count=40)
ALTX Yahoo Finance Info (http://finance.yahoo.com/q?s=ALTX.OB)
CBEV Yahoo Finance Info (http://finance.yahoo.com/q?s=CBEV.OB)
CDGD Yahoo Finance Info (http://finance.yahoo.com/q?s=CDGD.OB)
HLOI Yahoo Finance Info (http://finance.yahoo.com/q?s=HLOI.OB)
SOSV Yahoo Finance Info (http://finance.yahoo.com/q?s=SOSV.OB)
BSOI Yahoo Finance Info (http://finance.yahoo.com/q?s=BSOI.OB)
ISYM Yahoo Finance Info (http://finance.yahoo.com/q?s=ISYM.OB)
NVSC Yahoo Finance Info (http://finance.yahoo.com/q?s=NVSC.OB)
SIBM Yahoo Finance Info (http://finance.yahoo.com/q?s=SIBM.OB)
STQN Yahoo Finance Info (http://finance.yahoo.com/q?s=STQN.OB)
SDON Yahoo Finance Info (http://finance.yahoo.com/q?s=SDON.OB)
NTHR Yahoo Finance Info (http://finance.yahoo.com/q?s=NTHR.OB)
ITDN Yahoo Finance Info (http://finance.yahoo.com/q?s=ITDN.OB)
DLGO Yahoo Finance Info (http://finance.yahoo.com/q?s=DLGO.OB)
MRHD Yahoo Finance Info (http://finance.yahoo.com/q?s=MRHD.OB)
CDSI Yahoo Finance Info (http://finance.yahoo.com/q?s=CDSI.OB)
CPFR Yahoo Finance Info (http://finance.yahoo.com/q?s=CPFR.OB)
GPAX Yahoo Finance Info (http://finance.yahoo.com/q?s=GPAX.OB)
CRAO Yahoo Finance Info (http://finance.yahoo.com/q?s=CRAO.OB)
TARI Yahoo Finance Info (http://finance.yahoo.com/q?s=TARI.OB)

[Fergal]

Why would a company complete a reverse takeover rather than go through the normal incorporation and public offering process?

I've read some comments that companies might do this because they have an unfavourable or shady past?

Have you invested in shell stocks yourself?

[bojomojo]

actually no, they are not that available in our local stock market.
But they complete the reverse merger because they are not running any current activities.

[Fergal]

I can understand that the shell company would benefit from the reverse takeover. But, why would a trading business need to use a shell company, when they could go through the normal listing and public offering route?

[Nazreen]

This is my first time hearing about Shell Stocks. I just read up on it to see the risks involved with Shell Stocks. It seems that the risk is that most shell stocks remain dormant until a reverse merger is done. So normally, investors invest in these only when they hear that there might be a potential reverse merger.

[Fergal]

I wonder is there any research that shows what percentage of shell stocks become involved in a reverse take over situation? I'd imagine that it is quite low.

[bojomojo]

Actually it is quite big,
here are some examples: http://www.mergernetwork.com/c/public-shell-companies-for-sale/
go there and you will find alot for sale with pricing, I cant remember where was my most important example, bus as soon as i find it i will post it here

[Fergal]

Thanks Bojomojo, that list shows shell companies that are currently for sale but how many of them will appreciate significantly in value, due to a takeover?

[bojomojo]

That will take alot of study and I have been out of that field for like 4 months now, but I can get you the professional predictions if you want.

[Fergal]

No need for that, thanks Bojomojo. I've no plans to invest in stocks in the near future.