I am currently watching EERG. After going through EERG's financial statements it seems they had a really good year with over $5,000,000 in net sales and an EPS of 0.06. I thought that was extremely well seeing as their stock is only trading at .36ish. Their stock price is also steadily climbing.
But regardless on how well their stock is doing I think there is money to be made with their merger with AMZG. When the merger goes through AMZG will be absorbed by EERG, but AMZG shareholders will keep 80% of their shares and EERG will keep 20% of their shares. At first I thought that EERG shareholders were going to lose money, but by working with the numbers I think they will make money. Currently EERG trades at about 0.37 and AMZG trades at about 2.39.
80% of 2.39 is 1.912 and 20% of .37 is 0.074. Adding those two numbers up only gives us 1.986. So first off that 1.986 should increase at least back up to 2.39 (although I think it will go higher to the combined values to reach 2.76). Which means that anyone who buys EERG will make money even though their stock is being reversed 5 to 1 (which is where our 80% and 20% come in). For example, if you invested $10000 at 0.37/share you would have 27027 shares of EERG. With the reverse stock split you would have 27027/5 which is 5405 shares. Multiply this by 2.39 and you have $12919. That is a gain of over 29%!
That is where the money will be made.
What are your picks?
But regardless on how well their stock is doing I think there is money to be made with their merger with AMZG. When the merger goes through AMZG will be absorbed by EERG, but AMZG shareholders will keep 80% of their shares and EERG will keep 20% of their shares. At first I thought that EERG shareholders were going to lose money, but by working with the numbers I think they will make money. Currently EERG trades at about 0.37 and AMZG trades at about 2.39.
80% of 2.39 is 1.912 and 20% of .37 is 0.074. Adding those two numbers up only gives us 1.986. So first off that 1.986 should increase at least back up to 2.39 (although I think it will go higher to the combined values to reach 2.76). Which means that anyone who buys EERG will make money even though their stock is being reversed 5 to 1 (which is where our 80% and 20% come in). For example, if you invested $10000 at 0.37/share you would have 27027 shares of EERG. With the reverse stock split you would have 27027/5 which is 5405 shares. Multiply this by 2.39 and you have $12919. That is a gain of over 29%!
That is where the money will be made.
What are your picks?
