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Is this legal?


frommi

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Hi, i just came across a funny 8-k and i am wondering if this is legal.

 

http://biz.yahoo.com/e/140224/mrna8-k.html

 

The investor buys 6 million stock for 0.75$ and gets 6 million warrants for free. The stock is at 1.6$ after the press release and they can simply sell the shares, make a quick buck and still have the warrants left. That is an investment without risk. I want that, too! (and at that point i was really wondering if this is legal.)

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Guest wellmont

apparently. if you want to see other no risk investments check out blank check companies. this is what happens in extended bull markets....

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Hi, i just came across a funny 8-k and i am wondering if this is legal.

 

http://biz.yahoo.com/e/140224/mrna8-k.html

 

The investor buys 6 million stock for 0.75$ and gets 6 million warrants for free. The stock is at 1.6$ after the press release and they can simply sell the shares, make a quick buck and still have the warrants left. That is an investment without risk. I want that, too! (and at that point i was really wondering if this is legal.)

 

He's actually buying $6M of convertible preferred stock with the warrants attached.  The stock probably jumped because he gave them the cash they needed to survive, but it's probably not likely he would be able to sell a substantial amount of stock without the price moving down.  If things go well over time, he will have made a nice deal. 

 

If a company needs cash, you can make such sweetheart deals.  Look at Buffett's or Fairfax's deals with distressed companies in 2008 and 2009.  We are working on one ourselves at the moment, but obviously much smaller.  Cash is king!  Cheers!

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