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Daily Market Beat
A Small Cap Secret
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What Sent This Company’s Shares Soaring 30% Today?
The Answer May Amaze You…
Get the whole story on the driving force that may have sent this stock surging 30% by following this link…
http://www.on2url.com/app/adtrack.asp?MerchantID=53309&AdID=571464
Or, if you want to get in now, before it could go up another 30% tomorrow, you can get there ticker symbol HERE.
http://www.on2url.com/app/adtrack.asp?MerchantID=53309&AdID=571465
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In Today’s Issue…
What JP Morgan and China Have in Common (TF)
The Small Cap Secret (ED)
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Finally, a Day in the Red Where We’re Not Bleeding (Tim Fields)
After 3 days of green, we’re starting to see some red today and for a change it really isn’t that incredibly bad.
What was bringing down the market today was a 1-2 punch from China as well as JP Morgan…
With regards to China, the economic news coming from the Red country was not exactly up to par, reinforcing the idea that we’re slowing down in the global economy.
The reports revealed that China’s trade surplus was squeezed for a second straight month in September as both imports and exports were lower than expected. And that is somewhat of a barometer to the global economy.
Regarding JP Morgan, the stock was down over 6%, pulling the DOW down with it after they reported that their net profit was down.
JP represents the first major to announce earnings and they said that the European debt crisis is to blame for their poor marks, citing that the crisis pushed investment banking clients away.
Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia said, "People have known banks were going to struggle in this environment, but I'm still optimistic earnings will largely come in at lowered expectations. We've had a pretty decent rally from the nadir, but we can't continue to go straight up in the absence of anything definite from Europe. We've been rising on hope rather than anything tangible."
As of roughly 3:15 today The Dow Jones industrial average (DJI:^DJI) was down 15.25 points, the Standard & Poor's 500 Index (SNP:^GSPC) was down .95 points, the Nasdaq Composite Index (Nasdaq:^IXIC) is the only one trending higher, up 16.8 points.
That being said with all the indexes down, gold, silver, copper and oil were all down as well.
As of this writing:
• Gold: down 12.6
• Silver: down .969
• Copper: down .065
• Oil: down 1.12
We may see some improvement tomorrow as the European debt crisis seems to be getting better, but I really don’t think that will last that long.
Europe is no way out of the fire and time will only tell that their crisis will continue to weigh on the psyche of global investors for the foreseeable future.
Raising Capital Through Reverse Mergers – The Small Cap Secret (Eric Dickson)
We all know the sheer power of the IPO; public company files with the SEC, pays hefty fees, gets underwriters and presto change-o, they debut as a public company.
The problem has been that the markets have been too volatile this summer and companies have been taking deals off the table across the board.
There is no way a company wants to risk a multi-million (or billion) dollar deal when investors are more risk adverse.
While this does have a trickledown effect, it does leave room for another type of investment that is opening up…
And we’re in the midst of it right now, as Q4 is beginning to see a quiet surge of companies moving public.
These are not big, well-known companies like Groupon, but companies that are largely overlooked by the masses – and that’s the way we like it!
What type of companies?
As is the case with most penny stocks, not all companies have tens of millions of dollars to spend on going public. So how did they get their start and why is this little known market so lucrative?
Let’s see…
One of the major fundamentals of a successful IPO is that they’re generally not going to hit the markets cheap.
We’re going to see these companies come out at all sorts of price points, depending on their market caps, and we could be rest assured that we’re not going to be seeing companies like Facebook hit the street anywhere close to cheap.
So the question remains, where can I get into a new issue that that has the potential to return early investors triple digits?
The answer is reverse mergers.
A reverse merger is the least known, least publicized investment tool we have as investors. It’s where retail investors and venture capitalists pillage and take what’s theirs… far from the cry of greedy Wall Street fat cats.
Here’s how they work:
Unlike an initial public offering where there is going to be larger, more robust companies with very large operating budgets who can afford to apply for a stock symbol and to hire a high profile underwriter like JP Morgan or Goldman Sachs…
Most of these private companies want the benefits of being publicly traded; they just get in the market without the national publicity, and also, less financial strain.
So what this type of company will do is find some investors (venture capital mostly) and present their case. Once all the ducks are in a line, financing is in place, they then make their move…
This private company is going to find a bankrupt or folded company that still has an active stock symbol and trades on the market.
Now once they find this defunct, but active company, they propose to buy them out, only for their respective stock symbol and this will only cost the acquiring company somewhere around $1 million in most cases, a far cry from the “start from new” stock application and symbol.
It’s a lot like this:
If you want to open a bar in town you would first go to the town or county to seek out a liquor license. But with a new liquor license, the local jurisdiction say, only releases 100 and to have a new one penned in your name would cost an absolute premium.
Seeking to avoid these premium costs you find a bar in town which is going out of business and being that the liquor license is transferable, you offer the owner a few bucks for his license since he won’t be need it anymore.
In the end, you avoid paying a premium and now you can open up your new business with more of your cash on hand.
Reverse Merger Potential:
The media is our friend – that is because they’re nowhere to be found.
These companies go public and begin attracting investors without a single word being said in any major media outlet. And this is great for investors, because we don’t have the masses diluting the potential and adding to the volatility.
As small cap investors this is what we live for – A small up and coming company whose share price is cheap and ready to jump into the next level.
Retail investors in this arena have the buying power of a big wig on Wall Street and this is where we, the ‘main street’ investors, make our stand and pillages our profits.
The very best thing with a reverse merger is, you will find that a majority of these companies will be “debuting” way under $5 per share and most likely from a few cents to $1 per share, making a very lucrative opportunity because the upside is that much great in terms of buying power and percentage gains.
For more than a decade we’ve had firsthand experience with this market. And from our experience, we worked on a system that could get down to the street level and see which companies are coming down the pike and ready to have a boost in volume that could present a buying opportunity.
You see, these companies move based off demand, like anything else, but it’s erratic because of their illiquid nature. So when they pop, they run fast, and you have to make sure you strike quickly and get out, because the faster they move, the more attention they draw to themselves.
This can mean that as fast as they go up, they can go down – so it’s important to actively manage these investments with stop losses and price targets.
The first week of September I recommended a stock that was gaining a big following. At the time the stock was trading for $0.05. Knowing this market, I believed that the spike in volume would attract a lot of volume, but it also wouldn’t be too long before profits were taken off the table…
So I issued a first and second price target of $0.075 and a $0.10 respectively (and an initial stop loss of 25%). Shares hit the first target the next day… and a few days later, hit the second target for a 100% gain – all in a matter of 5 days – and this is how quickly you have to sometimes act in this market.
And it’s this experience that over time, and with plenty of bad calls and some good foresight, I’ve developed a 4-point formula that pinpoints positive attributes all successful reverse merger penny stocks stocks have in common.
Once you know this, it’s easy to find these gems (because we do that part for you) and know when you should get in and out of them (which again, we tell you).
It’s called the M.U.S.T Money Matrix…
See how using this formula I helped my investors bank 100% in 5 trading days.
See the Details Here
http://www.on2url.com/app/adtrack.asp?MerchantID=53309&AdID=571463
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Quote of the day
“Since the market tends to go in the opposite direction of what the majority of people think, I would say 95% of all these people you
hear on TV shows are giving you their personal opinion. And
personal opinions are almost always worthless…
facts and markets are far more reliable.”
--William J. O'Neil--