It's a virtual guarantee. When companies like this are going for private placements they like being off the radar screen.Get delisted, do the PP at sub 50 cents, then come back with a 1 for 20 reverse. At $10 after the reverse they short and run it back to $5 or lower. The short gets them their $ back from the PP and they own the stock basically free. The institutional guys and insiders know what they're doing. Watch the events unfold.
Hey C4 how long have you been around.....Last May we hit 76 cents before bouncing back to almost 1.40 and there was no talk of delisting....
Since then we have closed the $15.5 M deal wth Hongye and Zhongmo for STOCK.....Earned $300,000 in third quarter 2013 vs $100,000 in 2012.....fired up all 3 gasifiers at The Yima Project....Signed a packaging agreement with GE.....an exclusive marketing and engineering agreement with Simon India Ltd.....long term agreement with Hainan Dongfang....and you think delisting is a virtual guarantee....
YOU watch the events unfold.....SYMX gets revenue and technology gets validated from the Yima Project in Summer 2013 and the stock pops to $5.....But the fact remains.....SYMX gets $15.5 from Hongye and that stock gets delisted and watch Colin Tam and CVS just dry up and go away.....as well as everything else in China and India.
I am guessing the only person who will agree with your logic is Summer's Eve (Ricky's nickname during his 6 years in high school)......You watch what happens and you will learn from the likes on Corwin and Coalmines and others......
Hypothetically speaking, if you are currently long 100 shares at a current market price of $1 per share ($100 value), as these events unfold, you could see your share value drop to $50 (100 shs * $.50) on the OTC, then when the stock is re-listed you now own 5 shares after the reverse split at $10 market price with total market value of $50 (5 shs * $10). Then as they short, your position is desimmated to $25 (5 shs * $5).
Is this an accurate estimation based on your hypothesis?
your logic implies the PP lender has enough management control to effect a reverse split and unless Columbia Funds, BMO, Lamadrid and Bunnell are involved, it won't happen because they don't need that much money short term- my opinion.
How Delisting Works
The rules for delisting depend on the exchange and which listing requirement needs to be met. For example, on the Nasdaq, the delisting process is set in motion when a company trades for 30 consecutive business days below the minimum bid price or market cap. At this point, Nasdaq's Listing Qualifications Department will send a deficiency notice to the company, informing it that it has 90 calendar days to get up to standard in the case of the market value listing requirement or 180 calendar days if the issue is regarding the minimum bid price listing requirement. The minimum bid price requirement, which is $1, and the market value requirement (minimum $5 million, provided other requirements are met) are the most common standards that companies fail to maintain. Exchanges typically provide relatively little leeway with their standards because most healthy, credible public companies should be able to meet such requirements on an ongoing basis.
However, while the rules are generally considered to be written in stone, they can be overlooked for a short period of time if the exchange deems it necessary. For example, on September 27, 2001, the Nasdaq announced that it was implementing a three-month moratorium on price and market value listing requirements as a result of the market turbulence created by the September 11, 2001, terrorist attacks in New York City. For many of the approximately 400 stocks trading under $1, the freeze expired on January 2, 2002, and some companies found themselves promptly delisted from the exchange. The same measures were taken in late 2008 in the midst of the global financial crisis, as hundreds of Nasdaq-listed companies plunged below the $1 threshold. The Nasdaq makes other exceptions to its rules by extending the 90-day grace period for several months if a company has either a net income of $750,000, stockholders' equity of $5 million or total market value of $50 million.