Question: How do I sell currently owned stock from a company that just announced a $75 million IPO.?
I purchased Midas Medici stock at $3.65 per share. The stock recently plummeted to $1.05 per share. Midas Medici (formerly MMED - now WATT) announced a $75 million IPO with the option for insiders to sell between $3 and $4 per share.
1. What does this mean?
2. How do I sell my currently owned stock between $3 and $4 when it trades at $1.05?
3. Why did the price drop so fast and so drastically?
Answer:
Hahahahahaha....IPO means Intial Purchase Offer....how is this an IPO the company is already public!!!! It sounds to me that the officers of the company are trying to dump their share.
I love the Form S-1 filing on this http://www.otcmarkets.com/edgar/GetFilin…
It is great comedic reading. the part that I find most humorous is the RISK FACTOR section starting on page 11 and ends on page 24....I cannot list everything but I will list the cherry picked bolded items
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We have a history of operating losses and we may need additional financing to meet our future long term capital requirements.
We face intense competition from many competitors that have greater resources than we do, which could result in price reductions, reduced profitability and loss of market share.
We are highly dependent on third-party service and technology providers and any loss, impairment or breakdown in those relationships could damage our operations significantly if we are unable to find alternative providers .
We sell products and services from third parties that may require us to pay for such products and services even if our customers fail to pay us for the products and services, which may have a negative impact on our cash flow and operating results .
We may fail to adequately protect our proprietary technology, which would allow competitors or others to take advantage of our research and development efforts .
If we do not respond effectively and on a timely basis to rapid technological change, our business could suffer .
We may not be able to successfully integrate acquisitions to realize the full benefits of the combined business, and may therefore suffer losses or not be as profitable as planned .
We have significant related party transactions, which may be viewed unfavorably by investors .
We are controlled by our current officers, directors and principal stockholders. [THIS IS A RISK??]
You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.
Because we will have broad discretion and flexibility in how the net proceeds from this offering are used, we may use the net proceeds in ways with which you disagree .
Even if our common stock is listed for trading on the NYSE AMEX, our shares of common stock may be thinly traded, so you may be unable to sell your shares of common stock at or near ask prices or at all.
We are authorized to issue "blank check" preferred stock without stockholder approval, which could adversely impact the rights of holders of our common stock.
Our stock-based incentive plans may dilute your percentage ownership interest and may also result in downward pressure on the price of our stock .
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Hey...in spite of all this negativity....we want you to buy our new(??) offering at 3 -4 times the current price....hahahaha
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DETERMINATION OF THE OFFERING PRICE
... The price of our shares does not bear any relationship to our assets, book value, net worth or other economic or recognized criteria of value. In no event should the offering price of our shares be regarded as an indicator of any future market price of our securities.
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We picked this price because someone MIGHT buy it...hehehehe. I love this management statement
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We are a leading global provider of comprehensive information technology solutions to medium sized and large commercial enterprises and government institutions in the United States and Brazil.
...
We believe the breadth of our service offering and our consultative approach to working with clients distinguishes us from other providers.
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and as proof of this I offer three solid years of annual net income losses and if I had done this quarterly you would see every quarter as a loss....global leader phfffffffffft!!!!
http://tmx.quotemedia.com/financials.php…
Why such companies exist is beyond me....obviously no one checks out any details when they do put their money into them.You bought into a useless company. you did not have the skills to evaluate it and paid a common price. MAYBE the price of this stock will rise in anticipation of this "so-called" IPO...just like the pump that caused you to buy this piece of crap in October from the look of this chart
http://stockcharts.com/h-sc/ui?s=MMED&p=…
I wish you luck and hope you learn from this and obtain some skills to properly evaluate and eliminate junk stocks
Is the stock you own the same class as the stuff in the IPO? If so, you should just be able to sell it through a broker after the IPO hits. My guess is that your stock, for one reason or another, is not the same class - maybe due to a buy out or merger.
Have you read the S-1? Go to Edgar and read the S-1 on this company. There are 7M shares outstanding and they are going to add millions more. The revenue of this company is $60,000/year. A McDonald's manager has more revenue than this company. Then go read their "risk factors". They are trying to get into a business competing against IBM and Accenture and others.
The only reason for doing all this work to file SEC forms (and btw they want to be listed on AMEX not NYSE where they wouldn't have a prayer) is to scam people into buying their stock. This company is ridiculous. Buying this stock is ridiculous.
The "insiders" selling their shares include only the guy who founded the company who thinks somehow on $60K worth of revenue, he is going to sell 2M shares at $3/share. Are there people out there so stupid? Maybe...
It is a bulletin board stock. Has it really been IPO'd (and listed on a proper stock exchange)? I cannot see it anywhere. Make sure you are not being scammed! Prices mean nothing if there is no liquidity.Look at the historice prices (and volume) on Yahoo Finance.
The stock is still trading as a bulletin board under the symbol MMED. The symbol will change to WATT if their application to be listed on an echange is accepted.
<<<1. What does this mean?>>>
They are trying to raise money by selling shares at a price much higher than the current market price. Unless they already have a buyer lined up it is unlikely they will succeed.
<<<2. How do I sell my currently owned stock between $3 and $4 when it trades at $1.05?>>>
Unless the stock price goes up, possibly due to a reverse split, you cannot.
<<< 3. Why did the price drop so fast and so drastically?>>>
Drastic price changes are not uncommon for stock that are so illiquid. (According to Yahoo the average volume is less than 1,000 shares per day.) It only takes a few sellers to make the stock price nosedive. This is only a guess, but because the company had to file financials with the SEC to get listed it is quite possible some investors looked at the financials and decided to sell.