Primco Management, Inc. (OTCBB:PMCM) Keeps Soaring, Ups Authorized Shares
Yesterday Primco Management, Inc. (OTCBB:PMCM) managed to propel itself even higher, closing 155% up on heavy volume. PMCM stopped at $0.004, still well within double-zero territory, and moved 2.8 billion shares over the session.
The company published two new filings yesterday, putting an end to the whole outstanding shares mystery. PMCM published a Schedule 14C, informing the public that the board of directors approved an increase of the company’s authorized shares from 5 billion to 25 billion.
The same filing stated that as of February 13, 2014 PMCM had 4.8 billion common shares issued and outstanding. With the company banging on its AS limit and outstanding convertible notes as well as an equity purchase agreement with Southridge Partners II LP, it’s only logical that this level had to be raised. Still, that doesn’t make things any better for retail shareholders.
The press release accompanying the filing stated that in light of the price hike PMCM took from the absolute bottom at $0.0001 in January 2014 to its current price levels, the company will need to issue a lot less shares than it would have. With the cap raised as high as 25 billion, this is not too consoling. The equity purchase agreement with Southridge is at a 10% discount from a 5-day lowest market price. One of the convertible notes that accompany it comes with a 42% discount from a lowest closing bid price for a 19-day period prior to conversion, so the price increase doesn’t really affect that one.
PMCM managed to dilute its common stock from 194 million common shares in May 2013 to the current 4.8 billion in just under 9 months. Dilution of 2400% in under a year is no small ‘feat’ and it could be one of the reasons why PMCM hit rock bottom at $0.0001 this January. With the authorized share count upped fivefold, there’s no telling what retail shareholders may be in for next.
The company is now betting on the marijuana sector, moving in with its plan to lease real estate to legal medical marijuana businesses. Obviously, the market is in a sufficiently hyped-up state that traders would gobble up the stock of just about any company that announces a change of direction and makes a go for the green leaf. Still, in light of the share structure of PMCM, the fact that the company was targeted by some expensive pump emails in the past and its inability to deliver on certain past plans, including making sizable revenues from music catalog acquisitions in early 2013 or acquiring a stake in the Basketball Channel, eager pot stock enthusiasts may want to carefully weigh their options before rushing in.
