RE:Here comes cheap paper!TheInsider wrote: Toronto, Ontario (February 19, 2015) – Loma Vista Capital Inc. (“Loma Vista” or the “Company”) (CSE: LOV) is pleased to announce, further to its news release dated January 28, 2015, that BitGold Inc. (“BitGold”) has closed its previously announced private placement of subscription receipts (the “Subscription Receipts”) co-led by Dundee Securities Ltd. (“Dundee”), Clarus Securities Inc., GMP Securities L.P. and Canaccord Genuity Corp. (collectively, the “Agents”), whereby BitGold issued 7,777,777 Subscription Receipts at a price of C$0.90 per Subscription Receipt for aggregate gross proceeds of $6,999,999.30 (the “Offering”). PowerOne Capital Markets Limited acted as financial advisor with respect to the transactions described in this news release.
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Soooo in roughly 2 weeks time, 7.77 MIL $.90 cent shares will hit the market after their 4 month hold is up? Oh, and just under 4 MIL $1.35 warrants will be accelerated?
I am interested in getting long the deal, but why would anyone be buying beforehand? Won't prices dip to say low $2's when this paper hits the market?
The founders and early investors got in at the basement level. The 2 founders vended in their equity by millions of Loma Vista shares (last traded @ 7-1/2 cents on the Canadian Over-the-Counter) at an average deemed cost base of only 3 cents and merged Loma Vista into Bitgold, a private company with only an intangible asset representing only a Proof-of-Concept. The Bitgold's domain name with a web page was first launched in 2004. However, it has taken a decade to re-start the current operations. Past failures by e-gold and Goldmoney to launch a similar virtual currency backed by physical gold also failed to get traction. E-gold's founder was indicted by the US Govt. for money laundering. As far as the reselling of millions of locked-up shares is concerned, it could become a mass jailbreak & a flood of sellers when the 4-month restriction is lifted . I'm certain insiders and big investors have locked in some of their huge profits already by "shorting against the box" when XAU was much higher. They are allowed to dump their own shares or warrants without reporting it as a short position as it is considered a non-dispositive transaction until they unwound the trade. I expect XAU will go under $3.65 when the PP is closed on or before June 15th.