I have endlessly looked for the answer on google, but so far I haven't found anything. Maybe, my question hasn't been formulated good enough. Please, forgive me, English is my second language, but I will try to explain what I am trying to find out, in hopes that someone in here can help me understand.
This is my current understanding of how a reverse triangular merger occurs:
- There is a private company that wishes to acquire a public company (ticker ABC)
- The private company also wants to go public, let's say, at the NASDAQ
- The private company creates a shell company where the latter will acquire the public company
- Once the shell company acquires the public company, the private company acquires the shell company and goes public with a new ticker (XYZ)
The following is where I hope to make myself understood as best as possible:
So, let's say that the merger reaches completion. Now, on the very first day where ticker ABC turns to XYZ, does the chart of ABC remains? Meaning, does the history of ABC can still be seen on the chart even though the ticker is now XYZ because the private company is now public?
BACKGROUND:
I started to become familiar with the stock market back in February 2021. All the news of GME and AMC drew me in, and a whole new world was revealed to me. I was just sitting on the sidelines, reading the news and learning about the stock market, because I wanted to day trade.
The day came where I started day trading, and luck was by my side. I made good money. Then, in June 2021, I became interested in company ABC, and I invested in it. It turned out to be a scam, but I didn't know about this until almost two years later. However, during all that time, I kept adding and averaging down, believing that they had a good product. At some point, I just stopped adding and just waited to see the final news. The news weren't good at all. It was a bad product, and the price plummeted, after going through a reverse split first.
I waited for the price to be as low as possible, and I started to add again, hoping that at some point the company could provide some news on how to distribute the money and thus making the share price go up. The market value was way too low compared to its book value. And luck was again by my side, I timed everything correctly. And after being around $10-15K down for about a year, I was suddenly up $22K. The reason being because the company released news that a private company is going to buy the public company for a superb premium. They will do this through what they called a reverse triangular merger.
Now, as I said previously, many shenanigans have happened and I think they're about to happen again, but I discovered this too late. I'm down again $5K. The public company wants to do another reverse split because a reverse merger can not happen if the share price is under $4.00 per share. I wish I had known about that rule and I would have cashed out and wait to get a better position.
You are probably asking why not get out, take the loss and just start day trading again, or why be so obsessed with this company? Since June 2021, I was naively following the posts on Stocktwits, Yahoo Finance and Webull (my broker). The person posting there about the public company ABC was always the same person but with so many different accounts. I think that he has a team doing all the PR, the posting, and the technicalities of the buy, selling and shorting of the shares of ABC.
However, that person has made some mistakes and I caught on. Sometimes, he has posted the same thing on different accounts, word for word. Sometimes, he's been able to erase the posts on time, and other times he just forgets about it or is simply too lazy, thinking that maybe nobody is reading him. I think, to a certain extent, he's very arrogant because of the power that he wields. My guess is that he's very young but extremely smart with numbers and very knowledgeable in the stock market world.
Nevertheless, the key mistakes are the following:
- He has posted under different accounts images of somebody's P&L only holding the ABC shares.
- The images are from different brokers, sometimes in different languages. I believe they're from some Scandinavian country some of them
- The averages run from $78.00, $40.00, $22.00 and $8.00
And what I think that is going to happen is that once the new private company becomes public, then the price will go up drastically and rapidly because the other accounts with, at the current moment, losing averages ($78, $40, $22, $8) will be the points to grapple on in order to increase the price. Why do I think this? Because this guy or people have also posted about two other companies where the share price went up from like $2 to $45 and $60 in about 30 minutes. I always wondered how that could be possible, and I think that this is how they do it. Seeds have been planted with key averages which at some point are going to be bought to increase the price ten fold in a matter of minutes.
If my theory is right, then of course my average is awesome, and I could avoid a lot of taxes if I just hold on to my shares. I have held since June 2021, and I haven't sold ever. However, if the new reverse split is to happen, then most likely the price is going to be manipulated and the price should go down to what I believe just above $4.00. The reverse split that is being proposed is 1 to 2 — 1 to 5, depending on some bs. The current price is below $4.00. If the final price previous to the RS is $3, then after the RS the new price is going to be at the least $6 or at the most $15. And that should drop it back to just above $4.00 in order for the reverse merger to happen. If this is what is going to happen, then I can sell, because I could just acquire the shares at a very much much cheaper price, in case that the share price sky rockets once the merger is completed, then taxes are just going to be irrelevant due to how much money could potentially be made.
So, again, my question is will the old chart continue to be but just now under a new ticker? Or will the new ticker start a new chart? Please, don't ask me info about the real ticker. The question is simple I think. And I need to know if the old chart will continue to exist because that's how I could visually see if the grapple points have been reached.
If you made this far, thank you for reading. Please share your knowledge.
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