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Saturday, October 31, 2009

TMI FLOAT IS ONLY 752k !!!

TMI, a stock I recommended at $8 (upon approval of its business combination)See Blog Post, only has a float of 752k by my research below !!!

TMI is forecasting to earn $42m this year which would equate to approximately $1.45 EPS fully diluted after the transaction.

(23.9 outstanding + Treasury method on the warrants 12.3m warrants X $5.50 conversion = 67.6m dollars divided by current market price $9.15 = 7.4m shares that could be bought back. 12.3m warrants - 7.4m treasury method buyback = 4.9m dillution on warrants. 42m net income divided by 23.9m + 4.9m fully diluted = $1.45 EPS)

Competitors FMCN and VISN have P/E Ratios of 17-20 for this hot chinese sector.

FMCN $12 stock .69 EPS estimate per yahoo finance = 17 P/E
VISN $8 stock and .39 EPS estimate per yahoo finance = 20 P/E

If TMI were to have a 15 P/E on $145 EPS that would be $21.75 share price.


But the best part is that TMI only has a tradeable float of 752k !!


1) 23,917,413 Common shares outstanding after the transaction:

Read Link


Page 187 CME owners received the following in new TMI shares:

Zheng Cheng 13,266,684

Thousand Space Holdings Limited 6,095,085

Bright Elite Management Limited 2,303,231

That equals 21,665,000 of the 23,917,413 (leaving 2,252,413)

The 21,665,000 are locked up (cannot be sold) for 6-12 months

Page 92:

Lock-Up Agreements

At the closing of the Transaction, the Sellers will enter into lock-up agreements with TM, providing, among other things, that they not sell or otherwise transfer any of the shares of TM Common Stock received in the Transaction, subject to certain exceptions, for a period of:


• twelve months from the closing date of the Transaction or, with respect to the earn-out shares, from the date of issuance of such shares, for those shares beneficially owned by Mr. Cheng; and

• six months from the closing date of the Transaction or, with respect to the earn-out shares, from the date of issuance of such shares, for those shares beneficially owned by Thousand Space Holdings Limited and Bright Elite Management Limited.

Read Link

2) Of the 2,252,413 shares remaining, 1,500,00 are owned by the original TMI IPO investors (also on Page 187 of the Proxy). (Leaving 752,413 float).

The 1,500,000 are locked up for one year (cannot be sold) following the business combination, unless the stock trades over $11.50 for 20 consecutive days.

Page 49 of the TMI S-1

All of the initial shares outstanding prior to the date of this prospectus will be placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent, until one year after the consummation of our initial business combination. The
initial shares may be released from escrow earlier than this date if, within the first year after we consummate a business combination:


• the last sales price of our common stock equals or exceeds $11.50 per share for any 20 trading days within any 30-trading day period; or

• we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Read Link

THAT LEAVES A TRADING FLOAT TO THE PUBLIC OF 752,413 SHARES !!!

2 comments:

StocksOn.Blogspot said...

whats your take on RGTX? its up two days in a row... Pennystockchaser.com is promoting it.

jfh86 said...

Paul, just let me start by saying you've been right on the money before and thanks for the SKBI tip.

What do you make of TMI's delisting notice? Doesn't it have to do with the float? Doesn't the float need to be 1 million shares plus?

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