The Stockhouse Community is already aware of the DealRoom: Stockhouse’s vehicle to expedite financings for publicly listed companies while giving our own investment community greater access to these financings.
Previously, readers have learned that the DealRoom often offers instant opportunities for profit. When a Company lists its private placement, quite often the share price rises above that fixed price during this time period. This presents investors with an instant return on their investment by being able to buy in at less than the current listed price for those shares.
However, this isn’t the only instant opportunity for investors to turn a profit by turning to the DealRoom. Sometimes when Stockhouse clients use the DealRoom for their private placements the offerings consist of flow-through shares.
In Canada, the CRA offers investors a tax deduction for any purchase of flow-through shares. What this means is that even if investors are buying their shares for roughly the same price at which that the company is currently trading, the tax deduction on those shares provides an instant return for investors.
An example of this instant-profit opportunity is Alaska Hydro Corporation (TSX: AKH, OTCQB: ALKHF, Forum). Its private placement is offering flow-through shares at a unit price of $0.10. The Company has currently been trading at around 10 cents. No profit opportunity there, right? Wrong.
For investors at the higher end of the income scale, the after-tax cost of any shares purchased through this offering could be as low as $0.055 per share – an effective 45% discount. This is a large enough margin for investors to net an after-tax profit, even if the Company’s shares didn’t appreciate from the present price.
In other DealRoom news, Southern Lithium Corp. (TSX: V.SNL, Forum) is close to closing on its financing while Kontrol Energy (CSE: KNR, OTCQB: OTSHF, Forum) and Voyageur Minerals (TSX: V.VM, Forum) successfully closed on their DealRoom financings.
The Stockhouse DealRoom: better for companies, better for investors.
FULL DISCLOSURE: Alaska Hydro Corporation, Southern Lithium Corp., Kontrol Energy, and Voyageur Minerals Lts. are paid clients of Stockhouse Publishing.