I noticed that Dialpoint Communications Corp (OTCBB: DLPC) completed two acquisitions in January;
The first: Acquisition of Hostigation (Timothy Flavin), an asset transaction where the owners accepted 333,334 shares of Dialpoint stock. This stock has already increased 5 to 20 times (depending how you interpret the agreements) since the deal was inked.
The second: Acquisition of Brian's Computer Center, the press release stated “…the Company will issue unregistered shares of its common stock equal in the amount of 107,843 shares. The certificates representing the shares of common stock will bear restrictive legends.”
Dialpoint has a market cap of $38.6 million.
Am I impressed? Peeling back the onion...
- Dialpoint has 13.3 million shares outstanding - thats a lot.
- The Hostingation deal has a value of $50,000 at closing...a tiny deal
- The Brian’s Computer deal value looks like it was $170,000...another tiny deal.
- The stock increased from $0.51 on 1-17-08 to $2.90 today...thats a big gain.
- Dialpoint President Billy Radford ownes 11.25 million shares...Can you say $32.6 million?
- Over the last two weeks an average of 3,000 shares/day were traded...why bother.
If this was a deal put before one of my clients I would highly suggest we conduct extensive due-diligence prior to accepting a deal like this.
In these deals there is NO cash. The sellers probably cannot be liquid for at least 12 months, and with the current float it would be extreamly hard to sell the shares.
If you are selling your business I would tell you only to take stock as a small percentage from firms that are similiar to Dialpoint. The stock should be the upside - not the whole banana.
Other than the press releases and a couple of SEC docs I could find out almost nothing about Dialpoint. I will however admit they have been very successful in getting thousands of these two press releases pasted all over the Internet.
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