The DTC could care less about a dwindling numbers of shares in their system, they really only care about significant additions.
Iâll be glad to sit with a group of shareholders that are willing to sell a private block of shares to Auryn. If Auryn agrees to sign a loi for us to get them in cert form then why not?
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A few last comments:
Of course that comes down to Auryn being interested, but for the right price given their obvious desire for shares, why wouldnât they be? Undoubtedly they want JJâs shares for more reasons than one, so those shares are extra desirable to them. But with or without Juanâs shares, a private sale seems to make some sense from Aurynâs point of view, at least with the limited information we have.
There is significant risk, IMO, for Auryn, to just say: âhey, weâre going to buy 200M (or 300M) shares in the open market. Go.â If you know they have to, why would you sell while they are buying the first 100M or 150M? The last time they bought 150M or so it ran the price to above $0.10. This time current shareholders would know it was coming.
Accordingly the SP could get out of hand from Aurynâs point of view which makes it a non-optimal approach. Capturing as many shares as possible in a controlled fashion would be in their interest as long as the price is acceptable. In other words, if they can get 50M or 100M for less than it may end up running up the open market SP, then why not.
From large shareholders point of view, who may have a low enough cost basis this would be a way to get out, perhaps not at peak price, but without the risk of many big players trying to sell at some market peak price in a hugely volatile environment. So it is also a risk reduction for them. Obviously the price has to be high enough to motivate the exchange.
One risk to Auryn would be that even though they would probably make the group sign some type of NDA regarding price, it would be likely to leak out with a large enough group, especially this group. But that may be an acceptable âpriceâ to pay.
So perhaps this is a way to get the SP out of this hole it is stuck in.
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Here is where I see the problem in requesting certificates⌠The request for certificates goes to your broker since your broker is the registered holder of the stock held in Street name at the DTC. If this broker gets too many requests for certificates the DTC will say we canât issue any more, since you have exhausted your holdings. This would mean for example that the broker on record has only 100 M shares held in certificate at the DTC and the broker is showing 300 million shares represented by the individual account holders. The same broker received requests for 200 M shares to be made available in certificate form. I imagine that broker and the DTC would have a big problem and may put a restriction on issuing certificates. I know the Doc has a better handle on these issues, but I do know that they can place a freeze on issuing certificates under certain circumstances. fwiw.
A second way to bring about a similar result might be via a private placement by AHC/AMC. Whether the Quijanos comply or not with the terms of the July contract, AMC is going to need more shares in order to gain voting control. Letâs say theyâre willing to pay the Quijanos 10-cents per share to make the math easier. Maybe theyâd be willing to pay Medinah the same amount for restricted treasury shares. Youâd probably have to lift the current ceiling on the I and O.
Medinah sells them âxâ amount of shares for â.1xâ amount of dollars. Medinah takes the money and goes into the market and buys 5x that amount of shares at an average of 2-cents per share (admittedly highly unlikely but easy math). They demand delivery of those certs and cancel 5x amount of shares. They just removed a NET 4x amount of shares from our issued and outstanding number as well as 5x that amount from our âfloatâ because the AMC shares are RETRICTED. AMCâs percentage ownership of Medinah goes up because of this and perhaps places them into a CONTROL position. The numbers might need to be rejigged in order for it to be a win-win for both Medinah and AMC.
A similar methodology might involve this: Letâs say AMC knows theyâre going to exercise the ADL option. Medinah says weâll give you a $14 million credit towards the purchase price if you hand us $10 million TODAY. Medinah takes the cash and buys back and cancels a ton of shares before the share price goes nuts from the option exercising. A potential win-win for both AMC and Medinah? With whatever amount of shares AMC has in their back pocket today it will represent a larger share of the amount needed for voting control after the cancellation of the shares. There are dozens of ways to lever the current disconnect before the world gets confirmation of the existence of the disconnect.
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Karl, that doesnât make sense. Once a cert is deposited in the DTC, it goes into street name. The aggregate certs cover all the shares o/s and not tied to any one brokerage. The person that originally deposited the cert in say TD Ameritrade (only as an example as they would probably not take a MDMN cert) would probably sell some of the shares, meaning the DTC has no way of knowing on a daily basis how many shares each broker has.
Shares are being traded daily between numerous brokerages, and realistically, at this point the only brokers that would accept MDMN certs for deposit are the likes of Scottsdale, Spencer Edwards, ACAP, Primary, etc.
Now, I would agree if the request for certs was greater than what is on deposit at the DTC, that would represent a problem.
DTC appears in an issuerâs stock
records as the sole registered owner of securities
deposited at DTC. DTC holds the deposited
securities in âfungible bulk,â meaning that there are
no specifically identifiable shares directly owned by
DTC participants. Rather, each participant owns a
pro rata interest in the aggregate number of shares of a
particular issuer held at DTC. Correspondingly, each
customer of a DTC participant, such as an individual
investor, owns a pro rata interest in the shares in which
the DTC participant has an interest.
So once the participant ( broker) has exhaust its pro rata shares, but has not exhausted it demand for certificates. then than participant can no longer provide certificates. .
But âpro rataâ would mean âNumber of Shares Owned by a specific Brokerâs Customersâ divided by âTotal number of Outstanding Shares Minus known private certs already issuedâ (this last amount should be the DTCâs street cert amount.
And the DTC doesnât know what the numerator is. So while it is a nice bit of clean terminology, in practice no one is probably keeping track of what the âpro-rataâ division is between DTC and all the brokerages on any given day, week, month, or even year. If they donât keep track then it is easier to keep the âmore shares owned by brokerage customers than there are outstanding shares minus known certificatesâ problem under the rug. So until it became pretty obvious that âpro rataâ was all messed up, I think they would choose to try and keep that cockroach under the rug, maybe even buy a second rug and throw it on top.
Anyway, IMO
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Its unlikely Auryn will buy THAT MANY shares in a private deal
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even if it did come to the above scenario and the bug escaped the rug, the likely worst case would be the denial of issuance of a new cert, so the individual would be left in the same condition they were when they started
No?
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Why would someone sell 1k shares (16 dollars worth) just so we would be in the red. What does that accomplish???
Mms or shareholders working it down
Markets are getting hammered today
I donât know how many more next weeks I have in me!
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BRENT Oil just went through $29. Down over 6.5% so far.
1000 shares sold at the bidâŚ
One possible reason.
If you read the January 12, 2016 Medinah update that said next week management would be traveling to Chile to conduct business and would wait until they returned from Chile the following week before updating shareholders with the accomplishments of the meetings you might have sold a million or so shares over 2 cents. If true then you would likely be planning on buying them back during the price roll back expected in the coming weeks quiet period. What better way to encourage the price rollback than to seed it will an occasional 1000 shares thrown at the bid.
These theories donât make sense because they arenât a âwin winâ. Itâs a win for MDMN shareholders but it makes it more difficult and expensive for Auryn to gain controlling or full control. The Letts arenât evaluating opportunities to take advantage of our bloated capital structure or disconnects. They simply want the asset.
Anybody hypothesizing about these penny stock strategies clearly hasnât been following Volcan (trading at .17 down from 2.80 Sol). Does anybody believe the Letts are interested in playing these games when they already have the majority of their net worth tied up in another penny stock that is down 95%??
These fantastical stories never seem to end.
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Way back in the day, physical certificates were required as proof of ownership for stock. Obviously things are different now in this digital age, but do shareholders no longer even have the RIGHT to physical certificates to prove they have ownership of something that they have bought? The DTC can just refuse that? Given how messed up the markets are I guess that shouldnât be a surprise actuallyâŚ