$TRON "Theorizing a 48M/26M Hedge and Improving L
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Posted On: 12/11/2018 11:40:52 AM
$TRON "Theorizing a 48M/26M Hedge and Improving Lending by Hedging Restricted Shares Against a Series of Acquisition Loans:
Playing the Hedge:
48M bought at .0055 and 26M shorted. On the premise one wanted to hedge and sway a low-floater, this theory came to mind the other day and I thought I would share it in case anyone is interested and/or likes to prepare for "best case/worst case scenarios".
48,000,000 x .0055 = 264,000
If an entity wanted to drive the price up and drop it hard, knowing full well that the book value would be far higher than the price they drove it down to, this is how they could potentially play it to create profit and panic, and more profit on the second return.
Purchase 48M for $264k, push the stock up to triple the price without selling.
$264,000 x 3 = $792,000
.0055 x 3 = .0165pps
$264,000 / .0165 = 16M shares to recoup initial investment
48M - 16M = 32M free shares left
Slow bleed the 16M out near the top and recoup the 264, then sell 32M downward in timed increments, causing fear and doubt, and thus panic selling; and then while profiting at any price by selling the free 32M shares acquired, next thing you know is the pps is down to .0055 where the short position was entered and covering begins below .0055 before driving the price back up, picking up cheap shares along the way on panic.
Eventually the book value catches up and the stock won't trade below that value, but in a worst case manipulation, this is one theory on how the market makers or traders could use a hedge to manipulate a swing. This is being depicted to avoid panic or hopelessness for the long-term holders.
Best case scenario is that it was a long or a company insider that purchased the 48M and someone tried to short against it, leaving them in need of covering. This would create a very solid holding and a potential short squeeze in tandem. Rocket fuel.
On the premise that the company comes out with the 8k, and all of the numbers are within the expected range(s), then don't get shaken if an entity is playing with the gloves off right when the company has its best moment to date and shows definitive proof. The company can only influence the price by book value of its deals, or by the number of press releases it puts out. And while sometimes we are in the dark, I happen to like that Rene never pumps the stock. He goes to work building the company and gives info when it is available. I'd rather have a CEO that builds value, leading to a sustained climb, than one that knows how to dangle the carrot and influence the price via emotions, which is obviously an unsustainable method and return.
How Lending Could Become Better and Easier in the Future(Another Hedge):
InMed was acquired for $10.9M and 100M shares went to both InMed and Flagship. Flagship is the lender, so I will be predominantly referencing Flagship and their 100M shares going forward, while InMed is the product and driver on returns(both for Toron and InMed).
100M shares are given to Flagship in exchange for $10.9M to Toron for the purchase and acquisition of InMed; and for sake of simplicity, I am going to use .01 as the starting price per share.
For every 100M shares Flagship owns at .01, they yield $1M in share equity. Seeing as InMed is estimated to have +$100M in revs, it would be obvious that a .10 book value would be warranted(*understatement!). With a .10 book value, Flagship would now have $10M in share equity. And with InMed's revs, Toron could potentially pay Flagship back $3.63M/yr for 3yrs, by which time Flagship has almost doubled their money, making $10M profit off a $10.9M loan, with $20.9M in hand once the terms and payments are fully satisfied.
Using this model, if Flagship then lends another $10M for a similar acquisition, then in the case of all things being linear, the pps goes from .10-.20, leaving Flagship with $20M in share equity alone, while being paid from InMed. This makes things easier for Toron.
Now Toron could use annual profits from both InMed and the similar up-and-coming acquisition to pay back Flagship for the first loan, which could then be satisfied in full within 2yrs or less, provided that the $3.63M still comes from InMed, with additional profits from the future deal paying for InMed as well.
Once the InMed loan is paid, InMed can then assist in paying for the new acquisition, and each series of funding gets paid off faster and faster, with Flagship making $10M in equity every ten cents Toron climbs in share price, seeing as multiple acquisitions would be paying off a singular loan for each future acquisition, thus creating a scenario in which each $10M loan is paid off faster and faster. InMed's 100M shares also look nice, adding to their value under Toron's umbrella with each ten cent hike as well. InMed could get its own acquisition lending, while Toron uses InMed's value to leverage funding simultaneously.
So Flagship just keeps rolling over $10M to make $20M, and Toron climbs with each acquisition. And as each $10M loan is paid back, Toron wipes the balance sheet clean, becoming debt free every couple of years, with each acquisition improving the debt to asset ratio, with debt always maxing out around the $10M mark. Finally, above $1.00pps, lending becomes increasingly easier to find, and with better terms, while large institutions and retail investors become more fond of the increased safety of the stock, leading to swaths of new buyers(traders and investors alike). This pushes the price and creates increasing value for Flagship, making it a very favorable scenario to increase lending amounts, as their stock equity would be $100M, and now they could hedge $20M loans each time instead of $10M, with $80M hedged against $20M out the door, with multiple profitable acquisitions paying off the singular loan rather than just a one-for-one.
In closing, I do not know if either of these scenarios are accurate or are in play, but the double hedge theory has been crossing my mind for the past few days, so I wanted to get it out on paper(so to speak).
Whether the price goes up or down on the 8k or the run to follow, all that matters to me are the numbers that are in it. If the numbers are there, the price per share will eventually adjust to meet those numbers. Book value is book value.
Playing the Hedge:
48M bought at .0055 and 26M shorted. On the premise one wanted to hedge and sway a low-floater, this theory came to mind the other day and I thought I would share it in case anyone is interested and/or likes to prepare for "best case/worst case scenarios".
48,000,000 x .0055 = 264,000
If an entity wanted to drive the price up and drop it hard, knowing full well that the book value would be far higher than the price they drove it down to, this is how they could potentially play it to create profit and panic, and more profit on the second return.
Purchase 48M for $264k, push the stock up to triple the price without selling.
$264,000 x 3 = $792,000
.0055 x 3 = .0165pps
$264,000 / .0165 = 16M shares to recoup initial investment
48M - 16M = 32M free shares left
Slow bleed the 16M out near the top and recoup the 264, then sell 32M downward in timed increments, causing fear and doubt, and thus panic selling; and then while profiting at any price by selling the free 32M shares acquired, next thing you know is the pps is down to .0055 where the short position was entered and covering begins below .0055 before driving the price back up, picking up cheap shares along the way on panic.
Eventually the book value catches up and the stock won't trade below that value, but in a worst case manipulation, this is one theory on how the market makers or traders could use a hedge to manipulate a swing. This is being depicted to avoid panic or hopelessness for the long-term holders.
Best case scenario is that it was a long or a company insider that purchased the 48M and someone tried to short against it, leaving them in need of covering. This would create a very solid holding and a potential short squeeze in tandem. Rocket fuel.
On the premise that the company comes out with the 8k, and all of the numbers are within the expected range(s), then don't get shaken if an entity is playing with the gloves off right when the company has its best moment to date and shows definitive proof. The company can only influence the price by book value of its deals, or by the number of press releases it puts out. And while sometimes we are in the dark, I happen to like that Rene never pumps the stock. He goes to work building the company and gives info when it is available. I'd rather have a CEO that builds value, leading to a sustained climb, than one that knows how to dangle the carrot and influence the price via emotions, which is obviously an unsustainable method and return.
How Lending Could Become Better and Easier in the Future(Another Hedge):
InMed was acquired for $10.9M and 100M shares went to both InMed and Flagship. Flagship is the lender, so I will be predominantly referencing Flagship and their 100M shares going forward, while InMed is the product and driver on returns(both for Toron and InMed).
100M shares are given to Flagship in exchange for $10.9M to Toron for the purchase and acquisition of InMed; and for sake of simplicity, I am going to use .01 as the starting price per share.
For every 100M shares Flagship owns at .01, they yield $1M in share equity. Seeing as InMed is estimated to have +$100M in revs, it would be obvious that a .10 book value would be warranted(*understatement!). With a .10 book value, Flagship would now have $10M in share equity. And with InMed's revs, Toron could potentially pay Flagship back $3.63M/yr for 3yrs, by which time Flagship has almost doubled their money, making $10M profit off a $10.9M loan, with $20.9M in hand once the terms and payments are fully satisfied.
Using this model, if Flagship then lends another $10M for a similar acquisition, then in the case of all things being linear, the pps goes from .10-.20, leaving Flagship with $20M in share equity alone, while being paid from InMed. This makes things easier for Toron.
Now Toron could use annual profits from both InMed and the similar up-and-coming acquisition to pay back Flagship for the first loan, which could then be satisfied in full within 2yrs or less, provided that the $3.63M still comes from InMed, with additional profits from the future deal paying for InMed as well.
Once the InMed loan is paid, InMed can then assist in paying for the new acquisition, and each series of funding gets paid off faster and faster, with Flagship making $10M in equity every ten cents Toron climbs in share price, seeing as multiple acquisitions would be paying off a singular loan for each future acquisition, thus creating a scenario in which each $10M loan is paid off faster and faster. InMed's 100M shares also look nice, adding to their value under Toron's umbrella with each ten cent hike as well. InMed could get its own acquisition lending, while Toron uses InMed's value to leverage funding simultaneously.
So Flagship just keeps rolling over $10M to make $20M, and Toron climbs with each acquisition. And as each $10M loan is paid back, Toron wipes the balance sheet clean, becoming debt free every couple of years, with each acquisition improving the debt to asset ratio, with debt always maxing out around the $10M mark. Finally, above $1.00pps, lending becomes increasingly easier to find, and with better terms, while large institutions and retail investors become more fond of the increased safety of the stock, leading to swaths of new buyers(traders and investors alike). This pushes the price and creates increasing value for Flagship, making it a very favorable scenario to increase lending amounts, as their stock equity would be $100M, and now they could hedge $20M loans each time instead of $10M, with $80M hedged against $20M out the door, with multiple profitable acquisitions paying off the singular loan rather than just a one-for-one.
In closing, I do not know if either of these scenarios are accurate or are in play, but the double hedge theory has been crossing my mind for the past few days, so I wanted to get it out on paper(so to speak).
Whether the price goes up or down on the 8k or the run to follow, all that matters to me are the numbers that are in it. If the numbers are there, the price per share will eventually adjust to meet those numbers. Book value is book value.
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