LogFAQs > #954802175

red sox 777 posted...

So what is the appeal of merging a company into a dead ticker? Isn't it giving a windfall to the shareholders of the dead ticker?

This is the question I was most interested in with these custodianships, but it's a pretty simple one: the new custodian gets rich too. Really, the new custodian gets the richest of anyone with these deals. A new custodian is required to buy a large percentage of shares to attain custodianship of a ticker in the first place, so obviously if they can bring a good company into it, they can multiply their money an insane amount. It's a pretty similar concept to SPACs really.

And TSNP may have made George Sharp something like a hundred million dollars plus (mostly from the Humbl warrants he owns now through his own company Forwardly though, not directly through shares though those also made him absolute bank). And based on all I could find, Sharp was worth 1 to 5 million before that. Custodians also have to clean up debts and deal with whatever the previous management left behind though, and on the OTC, those are usually messy. It's not really a simple cut and dry process. Sharp seems to be one of the pioneers in doing it and has popularized it all of the sudden. We'll see how many others can actually bring worthwhile companies into this space.

As for old shareholders, this is another thing I'm really curious about and don't fully understand. It seems like most custodianships are granted to scam companies that most old shares were sold off in and share prices were ultimately driven down to almost complete zero, so very few shares are really owned anymore. But if you're a shareholder who had been holding on to the scam ticker for years or an old member of the board that has leftover shares you never dumped, and someone came along and got custodianship of it, yeah, you could end up very rich all of the sudden.

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