Maxima Group Inc (OTCBB:MXMG) Gets the Pump Treatment

Maxima Group Inc (OTCBB:MXMG) got pumped by Damn Good Penny Picks and the rest of the newsletters owned by Stellar Media Group LLC. The first emails started flying around after Thursday’s closing bell, and on Friday, some smaller newsletters also jumped on the bandwagon. As a result, MXMG logged its first properly active trading session.

In a matter of six and a half hours investors traded more than 150 thousand shares which means that at the end of the day, the dollar volume stood at a little over $180 thousand. Despite the pumpers’ efforts and the increased interest, however, the stock failed to move. It did open the day with a gap up and it stayed in the green for a short while, but as the session progressed, the ticker started slipping and it eventually came to a close of $1.15 per share – exactly the same as Thursday’s value.

The stock didn’t perform too well, and the people that were left holding it over the weekend are probably a bit worried at the moment. Time to find out what they bought exactly.

They bought shares in a public company that went through an interesting deal recently. At the end of May, a private Delaware entity called Smash Solutions LLC announced that it has acquired 200,000,000 shares (or about 82% of the total O/S count) from Germans Salihovs, MXMG‘s now former CEO. A press release came out a few days later which said that Smash Solutions will effectively become a subsidiary of MXMG and that this is a way for it to go public. Yet, neither the 8-K accompanying the stock purchase agreement, nor the 10-Q for the period ended May 31 mentions anything about a possible combination of business. The press release also said that Smash Solutions’ financial statements will be published as soon as they’re audited, but right now, almost three months later, they’re still not out. And what does that mean?

It means that when people are buying MXMG, they don’t know whether they’re buying an established company specializing in the internet marketing business or whether they’re buying a development stage company that has less than $2 thousand in total assets.

They are buying shares, however, and they have the right to know where these shares come from. Luckily for them, finding out is not that difficult.

We know that there are 243,000,000 shares issued and outstanding and we know that 200,000,000 of them are restricted and are held by Smash Solutions’ shareholders. This means that there should be 43,000,000 shares floating around. Here’s how they came to be.

Unlike Smash Solutions, Maxima Group decided to have its stock listed on the OTC Markets using the traditional way of offering shares to the public. A total of 5,000,000 shares were offered at $0.02 per share. Only 1,075,000 were sold.

In March 2015, less than a year after completing its IPO, MXMG decided to effect a 40 for 1 forward split which means that the people who bought the 1,075,000 shares suddenly found themselves holding exactly… 43,000,000 shares. And they paid just $21,500 for them.