Specialists for OTCBB & Nasdaq StocksWritten by William Cate
Specialists for OTCBB and Nasdaq Companies By William Cate Published June 2000 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]An orderly market should be goal of every public company. Sharp rises or falls in share price attract regulators. A rapidly rising share price feeds upon itself and guarantees a share price collapse. A sharp drop in your share price creates selling barriers. When you attempt to revive your strong share price, your shareholders dump their stock. A steady upward climb, with minor downward adjustments, keeps shareholders loyal. The question isn't how high can you drive your share price? It's how long can you sustain your current share price? One weapon in your share-price stability battle is trading of your stock by a specialist. Most U. S. Stock Exchanges use a specialist to match buy and sell orders to create an orderly market. When buying and selling are relatively constant in any U. S. Stock Exchange company, market is orderly. Specialist can be overwhelmed with selling and this leads to a market correction or a Bear Market. But matching principle is sound. The National Association of Securities Dealers (NASD) rely upon their brokers acting as Market Makers to act as specialists. This is basis to Bid/Ask price structure in OTCBB and Nasdaq Markets. The NASD policy doesn't work. The Market Makers goal is to make money for their brokerage firms. Share-price stability is counterproductive to profit, because it reduces trading. The Market Maker needs volume to profit from a stock. Trading volume infers instability as buyers go into a feeding frenzy or sellers panic. Feeding frenzies and panics kill public companies. If your company trades Nasdaq or OTCBB, your investor relations person MUST act as a specialist for your stock. They must trade your stock to maintain an orderly market in your share price. Your specialist's job is to maintain current share price, not to drive it up. Your specialist should have a short term goal in restructuring your shareholder base. For example, EFHCF's current share price trading allows speculators to sell at a profit. However, my goal is to replace speculators with investors who will hold stock as it moves up. If I achieve my goal, I'll need less buying to sustain a higher share price.
| | Reg D/SCOR OfferingsWritten by William Cate
Reg D (SCOR) Offerings By William Cate Published May 2000 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/] I don't fund private companies! Without liquidity, professional money isn't interested in your company. See my "Simple Secret" report for a discussion of need for liquidity. Section 12 Para 504 Reg D of 1934 Securities Act allows entrepreneurs to raise up to one million U. S. Dollars from public. You don't need an audit. Your offering is exempt from a review by U. S. Securities and Exchange Commission (SEC). About 38 States, relying on this provision, allow entrepreneurs access to investors under SCOR (Small Corporate Offering Registration). If you don't file with SEC or your State, you aren't protected from investor action, should anything go wrong with your company. Since odds of investment failure are over 95%, you are inviting serious legal problems, if you don't do simple Government filing. Any book on "going public" will give more help on doing proper filing. In January 1998, "Money" published an article on success of RegD/SCOR offerings. Then, entrepreneur had one chance in four of raising at least $200,000. This means that 75% of entrepreneurs doing REGD/SCOR offerings were wasting their time. Your odds of success are probably worse today. Starting in June 1999, National Association of Securities Dealers (NASD) stopped listing of RegD/SCOR offerings from trading on OTCBB. Without OTCBB liquidity, investor interest in RegD/SCOR offers has declined. Until 1984, there was strong interest among many American brokerage firms to sell RegD/SCOR offerings. They were sold as Tax Shelters. The 1984 Tax Act ended use of Tax Shelters. By 1987, most brokerage firms were no longer interested in RegD/SCOR offerings. Today, I'm unaware of any NASD member willing to sell a RegD/SCOR speculation to their clients. Without a professional network to sell RegD/SCOR package, officers and directors of company are only LEGAL sellers of these RegD/SCOR packages.
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