As part of my free trial of Contributor’s Corner, last week I bought 499 shares of Advanced Nutraceuticals (ANII.OB). ANII makes vitamins and supplements, and recently filed for a 500-to-1 reverse stock split. It’s doing this order to get under 300 shareholders and thus avoid all the paperwork involved with Sarbanes-Oxley compliance. Now, this could be a good or bad thing in people’s eyes, but I’m not focusing on that.
What I am focusing on is that in order to get rid of all the small shareholders, they are going to pay $4 for each share if you have 499 shares or less. ANII.OB is currently trading at ~$3.45. That’s about a 16% gain, and from George and other sources it seems like it is likely to go through. Here are some more articles:
SEC Preliminary Proxy Filing
Advanced Nutraceuticals Chooses to go the De-Listing Route
ANII Continues to Lure Away Shareholders (follow-up article)
The original price was $3.20, but they raised it to $4, which shows that they really want to get rid of the smaller investors by giving them a good reason to sell. I also like that this is a profitable company with a reasonable P/E ratio, so even if this somehow falls through this stock won’t disappear. There is a vote to approve this reverse split scheduled for September 8th, but sometimes the dates get pushed back. George says to estimate about 6 months to actually get the cash in your account. 16% gain in 6 months? I’m game.
But please don’t buy this stock just because I did, I am pointing it out because this is something I’m doing with my money, and you can do your own research and see if it’s right for you.
Full disclosure: Both George and I own 499 shares of ANII. I bought at about $3.42 on average. I think he bought at $3.10 though, the punk! I guess that’s why he runs the site and not me
By Jonathan Ping | Investing | 8/12/06, 1:10pm