Our readers should remember well our previous coverage of theglobe.com, inc. (OTCMKTS:TGLO). A significant amount of volume seen recently in the exchange had drawn the attention of many market participants. We believed that something big could be coming. Therefore we decided to communicate it to our readers.
Our belief was not wrong.
We appreciate that after our piece was published, the stock returns delivered by the company have been extraordinary. Congratulations to our readers and subscribers who could read the article.
Company Logo - theglobe.com, inc. OTCMKTS:TGLO
From trading at the level of $0.05, the share price spiked to hit the one-year highs of $0.30, representing an astonishing 500% stock returns, which are incredible even in the OTC universe. Check out the following stock chart before we provide an assessment of the new information that arrived in the market.
2 months chart for TGLO
For starters, we are reviewing the history of TGLO. The company went public on November 13, 1998, and was said to be one of the first online communities on the internet. Its founders developed a network of members, who would provide information about their online experience and interests.
After many years operation and several activities, the company started a lengthy restructuring process, wherein it sold assets to a financial buyer, Tralliance Registry Management Company, LLC, and has been looking for new venture opportunities in other industries.
A company has acquired a significant stake in the company
Our readers should remember that several market participants had agreed to buy 70.9% of the issued and outstanding shares of the company’s common stock. The contract also said that Michael S. Egan, Edward A. Cespedes, and Robin S. Lebowitz, which were members of the Board of Directors, will resign.
We said that we had to be very alert on the news, as new information could make the share price run:
"The transaction is not yet closed, but we don’t see why it should not. There are still certain conditions, such as the company will terminate working with Dancing Bear and pay several debts to this stakeholder. Once they are all satisfied and the change in control is official, the share price could increase." Source
We were right in saying so. On January 11, 2017, the market received a filing noting that Fairwood Peninsula Energy Corporation and Delfin Midstream LLC had acquired 70.9% stake in the company, which means that the agreement successfully closed. The following is an image of the document to which we had access:
Acquisition of a 70.9% - theglobe.com, inc. OTCMKTS:TGLO
Please note the following text from another filing released the same day, in which it clearly stated that the agreement closed and the purchase was confirmed:
"Michael S. Egan and certain of the Company’s other stockholders entered into a Common Stock Purchase Agreement with Delfin Midstream LLC, a Delaware limited liability company. Pursuant to the terms of the Purchase Agreement, the Purchaser agreed to purchase an aggregate of 312,825,952 shares of the Company’s common stock, par value $0.001 per share, representing approximately 70.9% of the issued and outstanding shares of the Common Stock, from the Sellers. The closing of the purchase and sale of the Purchased Shares occurred on December 31, 2017." Source
Additionally, it also noted that the certain members of the Board are going to resign:
"Michael S. Egan, Chief Executive Officer and Chairman, Edward A. Cespedes, President, Treasurer and Chief Financial Officer and Director, and Robin S. Lebowitz, Vice President of Finance and Director, resigned from the Board and their respective officer positions with the Company." Source
What happens from now on?
The most important question that we need to address now is what are the plans for TGLO. In the new documents that we could consult, we did not find any information in this regard. We could only read the profile of the new director, who was appointed to the Board. In our opinion, his business expertise could provide new information about the new activities of TGLO.
The filing says that William R. (Rusty) Nichols will serve as a director until the new annual meeting of stockholders is celebrated. He has been involved in the civil construction, real estate, and oil and gas businesses for 40 years. For two years, he has been the director of the predecessor entity of Fairwood Peninsula Energy Corporation, a midstream LNG company focused on providing critical infrastructure for the floating liquefaction industry. Mr. Nichols is a graduate of the University of Texas at Austin.
What's going on with the share price? - Conclusion
We believe that many market participants were expecting that TGLO would merge with the acquirer. The merger would mean that TGLO would be able to share its know-how with the buyer, and the assets of both companies would increase. In the filing, we could not read that the transaction was going to close in that way. As a result, we believe that the share price did spike, but less than expected.
In our opinion, we will need to keep monitoring the news from the new owner of TGLO. He will have to note what is the plan for the listed company. Additionally, it will be critical to see if the new owner sends TGLO's latest financial statements. This further information could also move the share price quite a bit, thus be alert.
Before more details about these aspects are provided, in our opinion, dealing with the share is quite risky. We believe that readers that got in on the back of our prior coverage should look to protect gains until the picture becomes clearer.
We will be updating our subscribers as soon as we know more. For the latest updates on TGLO, sign up below!
Disclosure: We have no position in TGLO and have not been compensated for this article.Image courtesy of Judy van der Velden via Flickr
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