We thought it would be fun to upload a short video highlighting the rules of our Weekly MVP OTC Contest and Bi-Weekly MVP Big Board Contest. This video just shows the very basics to get you started in submitted an eligible pick. Additional contest rules can be found on our MVP website by visiting this link:
OTC Contest
Big Board Contest
Submit your Quality OTC Stock picks in our weekly MVP OTC Contest and submit your Quality Big Board Stock picks in our Bi-Weekly MVP Big Board Contest. Contest submission periods start after the closing bell Friday and end Sunday 11:59PM ET. We welcome all entries into our contest. Stop by Investors Hangout where you can discuss the contest stocks and submit your weekly pick. http://investorshangoutmvp.com
Also, check out our website for Daily Contest Quotes, Updated Rankings, Stock Charts, DD, Stock Market Analysis and more!
http:// ihmvp.blogspot.com
Friday, October 18, 2013
Barriers to Small Business Growth
The CEO of the OTC Markets Mr. Coulson, addresses the House subcommittee on capital formation in June 2013. In his talking points he mentions several barriers to small business growth. The main point he discusses is the tax rates for small businesses and how their higher tax rates compared to larger corporate firms puts them at a capital disadvantage. In addition, he mentions that there should be additional transparency when it comes to who is behind trades.
Toxic Financing Deals: The Love of Short-Sellers
You may have come across an OTC stock over your years of trading and investing that had one of the worst combination for any OTC investor and the company for that matter. At some point the company decided to take on debt to finance operations, which included the rights of the debtor to call the debt due and have shares issued to cover the debt. This convertible debt is commonly referred to as toxic financing.
From an investors perspective it is relatively obvious how damaging this type of toxic financing can be to your investment. Once the debt is converted into shares of common stock, the sale in the public markets inevitably dilutes the percentage ownership of your shares in that company. The additional shares in the market, if not acquired by interested buyers, can depress the stock price. This form of dilution is music to the ears of short sellers who can have a tremendous impact on the stock price during the dilution.
Here is a basic scenario of what happens during periods of dilution, and the ultimate reason for a stock pps decline:
The solution to this problem needs to be addressed by the markets them self. Institutional investors, banks, and large retail investors do not like the risk involved with these types of companies. Thus, these companies have limited resources when it comes to raising financing. A desperate CEO will likely end up taking a toxic deal in the hopes that they can pay the debt prior to it maturing. When they can't, the market value of that company takes a huge hit.
Making additional financing options available to these small and micro-cap companies will help to address some of these market-related issues. Companies will take on less toxic financing and hopefully have better opportunities to grow their business.
From an investors perspective it is relatively obvious how damaging this type of toxic financing can be to your investment. Once the debt is converted into shares of common stock, the sale in the public markets inevitably dilutes the percentage ownership of your shares in that company. The additional shares in the market, if not acquired by interested buyers, can depress the stock price. This form of dilution is music to the ears of short sellers who can have a tremendous impact on the stock price during the dilution.
Here is a basic scenario of what happens during periods of dilution, and the ultimate reason for a stock pps decline:
- Dilutive MM shows up on the ask (e.g. BMAK or VFIN/VERT)
- MM's such as VFIN & VERT work in tandem to maximize the pps realized for the group or individual selling the stock.
- One shows on the bid to symbolize strength, while the other will show 10k on the ask so that those buying will buy at the ask instead of parking on the bid
- It might take a day or two for the market to realize that dilution is in fact taking place
- The chatter on stock message boards quickly changes
- New aliases show up touting the ill effects of this dilution, calling the company a scam, POS, and more
- This causes emotional investors to react irrationally selling into the bid
- Short-selling commences and often-times involves them jumping over the dilutive MM to sell shares to the interested buyers
- Then the walls on the ask show up to push the price lower to be able to cover
- If the dilutive MM is not finishing selling their shares, this cycle continues and the short-sellers can continue to depress the stock price
The solution to this problem needs to be addressed by the markets them self. Institutional investors, banks, and large retail investors do not like the risk involved with these types of companies. Thus, these companies have limited resources when it comes to raising financing. A desperate CEO will likely end up taking a toxic deal in the hopes that they can pay the debt prior to it maturing. When they can't, the market value of that company takes a huge hit.
Making additional financing options available to these small and micro-cap companies will help to address some of these market-related issues. Companies will take on less toxic financing and hopefully have better opportunities to grow their business.
Tuesday, October 15, 2013
Contest Update: Daily Volume Alerts & News Updates
We only have a few contest stocks that have news out today. FMCC is one stocks with the news being about how the government shutdown could affect the housing market, which is pretty obvious. The other stock with news was Nokia, which was mentioned in an article regarding Microsoft. The article talks about the rating for Microsoft, and mentioned the Nokia handset operation.
Contest Stocks with Volume Alerts:
NOK trading 32M+ shares, currently up 4.23%
ANDI trading 93M shares, currently even on the day
MINE trading 34M+ shares, currently up 22.73%
TDEY trading 51M shares, currently up 18.18%
TGGI trading at 180M+ shares, currently up 14.29%
Contest Stocks with Volume Alerts:
NOK trading 32M+ shares, currently up 4.23%
ANDI trading 93M shares, currently even on the day
MINE trading 34M+ shares, currently up 22.73%
TDEY trading 51M shares, currently up 18.18%
TGGI trading at 180M+ shares, currently up 14.29%
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