If you’re wondering about the Bad Toys announcement this morning, it’s just as it appears. The stock will not trade x dividend today despite the fact that the company had previously announced that January 11th would be the cut off date.
I am hearing anecdotally that the NASDAQ is involved in the dividend distribution process, and that they will have some say in the date the stock actually trades without the dividend attached. Because this is such an unusual event, there is discussion is going on about how the dividend will be handled. Issues under consideration include how the dividend will be distributed- will the company simply send you your shares?, or will they send you a letter stating you are entitled to the shares, and send them to you when Southland opens for trading on their own.
BYTH has given a little ground after being a great trade for the early going in ’06. In theory, today’s announcement really changes nothing, so the stock price really should not be affected. However, if it were to drop in price, I would view it as an opportunity to accumulate. You might have a few more weeks to get on board.
Comments and questions are welcome.
Any more news on BTYH? Are its shares still trading with its dividend attached?
Editor: Yes, the stock is still trading with the dividend attached. The delay is strictly regulatory. The regulators are trying to decide exactly how they want to dividend handled. I believe the stock is trading poorly because the market is questioning whether the company is really commited to the process. I can tell you they are. I believe the stock is a hell of a buy.
I hope the spinoff comes pretty soon. The feet seem to be dragging. Any news of movement would be appreciated. Thank you.
Editor: Since the hold up is on the regulatory side, not the company’s side, there is no telling how long it will take. Hopefully, they will resolve the issues shortly, and get moving. Filing the S1 is the big deal in my view. It’s a big step towards getting Southland trading on its own.
Has the S-1 been filed? I searched the EDGAR documents and found 37 S-1 filings in 2006, some as recent as 1/31, and I didn’t see a filing under the name of “Southland”, or anything similar. Thanks for any information you can provide.
Editor: Of course not. It is very important people understand this. The company cannot file an S-1 until the stock goes x dividend. There is a list of selling shareholders in any S1. People who receive the dividend are considered sellng shareholders. It doesn’t mean you have to sell- you are just eligible to do so. How can there be a list of selling shareholders before the cut off date? Can’t be done. There will not be an s1 filing until the stock goes x dividend. I will let you know as soon as the s1 is filed.
Since the stock has gone down in price, is this a good time to get more shares?
Editor: Absolutely. I believe the Southland spin off is definately going to happen as soon as the regulators figure out how they want it done.
I have to assume things are still working through the regulatory board hopefully finalizing details… based on that will the company have to set a new deadline for the x dividend once regulators agree how it will be accomplished? Certainly before the S1 is filed.
Editor: I have heard it is possible for the S1 to get filed even before they go x dividend. However, we just have to wait and see.
Is the divend defined or is it part of the pending issues to solve?
Editor: The dividend is 1.3 shares of Southland for every share of Bad Toys you own.
So what’s the word on Bad Toys?? I thought the regulators would have completed their determination by now. Cendent (CD) is another company planning spinoffs and they are soon to start. I figured BTYH to precede them.
Editor: Good question- I will call Lunan today for an update.
I talked to Larry Lunan today and would like to visit with someone in your firm, is this possible ?
Editor: You can always email editor@otcjournal.com with any questions or thoughts you might have.
Why the heavy trading and drop in BTYH today?
Editor: There is a rumor associated with one renegade seller of a fairly large block. It is my personal opinion the spin off is near at hand, and I would use someone else’s weakness as an opportunity to grab some cheap.
Is it still possible to get the dividend if bad toys stock is purchased before the split
Editor: Yes. As it stands today, if you own the stock you get the dividend. We don’t know when it will trade x dividend because of the conflicting rules, but the company has stated it would try to give everyone 10 days notice.
Is it too late to buy to get the divi ???TIA
Editor: No. As it stands today, if you own the stock, you get the dividend. We will let everyone know when it is going to trade without the dividend.
I have heard that as of January the mimimum listing price to get on the AMEX is now $2.00 instead of $3.00. Therefore if and when BTYH gets listed on the AMEX it might not go up as much as many people think.
Editor: OK- let’s say it’s $2. If you own 1,000 shares at $1.50, that’s $1500. If the stock opens at $2, your 1300 shares of Southland is worth $2,600, plus you still own your shares of Bad Toys. My guess would be Bad Toys will trade at about $.50- it will still own 1/3 of the shares of Southland. There’s another $500. Net: Your $1500 is now worth $3,100. More than a double. Why is this possible? Because Southland is worth that much. There’s your upside. Downside: None of it ever happens and you still simply own your Bad Toys. You tell me- Is the upside worth the downside? Up to you. I believe it is a great speculation as the downside is pretty minimal.
I can’t help but think ‘if it sounds to good to be true it probably isn’t’ applies to this stock. If Southland is making money that value should be reflected in the price of BYTH. How can someone spinoff something more valueable than itself? Doesn’t make sense to me.
Editor: If you read the original presentation on the company back in early January, the concept is fully explained. This is a very special situation, and not without risk. Personally, I believe there is a good chance the CEO can pull it off. Everything pencils out on paper. However, there are 6 million reasons it could be hard to do. That is the number of shares that will be free trading at a substantial discount to the prevailing market if the company pulls it off and opens for trading at either $4 on Nasdaq SC or $3 on AMEX. On the other side- Southland, separated from parent company Bad Toys, is worth the price. Read the original presentation. Check the current profiles button on the home page.
Since it is the 31st, what do you think about the S-1 filing? Is the company just trying to deal with bureaucrats who do not care about timeframes or are they misguided in their expectation of getting this “dividend” split?
Editor: It will be out soon. Some delays as it took them longer to 1ok out than they expected.
ANYTHING NEW REGARDING BAD TOYS HOLDING & SOUTHLAND HEALTH SERVICES In mid-march BTYH announced the filing of 10-K filing for Bad Toys Holdings and the S-1 for Southland Health Services, Inc. would be completed in March. March is over and I have not read any press releases or articles that the filings were accomplished. Can you provide an update on this ?? Thanks, Walt F.
Editor: Check today’s edition- you only need to post once.
Inthe last month including yesterday one of the insiders sold 60000 shares. Why would he do this unless he knew something we did not.
Editor: As I have said, a little knowledge can be a dangerous thing and misinterpreted. No insider sold 60k shares last month. If you read the filing carefully, it says “planned sale”. This can mean a million different things. In this case, the shares were just moved from one brokerage firm to another. Either way, it’s not important. If you are concerned, just sell your stock and get out. Insider buying is always good, but insider selling isn’t too meaningful one way or another unless it’s in large quantities across the board. In this case, pretty small stuff.
OK, so now April is over. Any update on the S-1 filing re: Southland? Is this deal ever going to happen or is it unofficially dead?
Editor: I spoke with the CEO last week. The only hold up is the lawyers getting the documents done.
What is the hold up on the documents? There has been plenty of time to collect the financials and file the papers. Please do not answer in general terms, but give a real detailed answer. It would appear that the company and you have lost a lot of credibility over this issue. thanks
Editor: I am told it’s the attorneys getting the document done.
please re-read my question from 5/4 carefully and answer it in detail. simplely to say the lawyers have the doc’s is not an answer. What details are holding up the completion of the spin-off. Why are they having a hard time getting their act together? thanks richard shaffer
Editor: I will answer your question as succinctly as possible- I spoke with CEO Larry Lunan week before last and complained at the amount of time it was taking to file the S1. His response was to explain the entire hold up was being caused by the amount of time it was taking his law firm to generate the document. He said they had put his project on the back burner a couple of times, and was furious about it. He had just completed a conference call wherein he demanded an accelerated pace. That is exactly what I know.
In your answer to my last question you said ” the lawyers were dragging their feet and that the CEO had made a conference call to the lawyers demanding action” What was the result of that call? Is anything moving now? I think THE DONALD has a phrase that would cover the lawyers[if they are not going to do the paper work]—YOUR FIRED. I know that this would cause another delay—but might be faster in the long run. Month after month we hear the same thing about “soon” We are getting into the cry wolf syndrome and the company is losing credibility
Editor: Agreed- don’t have an answer today. Will call first thing next week.
In answering my last question you said you would contact the CEO this week. Did you make the contact and what is the status of the filing? thanks richard shaffer
Editor: There are two ways to get information from the OTC Journal- the blog and the email editions. In the edition published earlier this week on ACTC, a sidebar covered your question. The company also mentioned they were very close to filing in their quarterly earnings release on Monday.
I am confused. How did the stock price fall .45 with such a low volume of trading. Did someone just cut bait and sell at a rock bottem price. The company is still profitable so how does one (or just a few) trades drop the value so dramaticaly?
Editor: It only traded 166,000 shares and fell apart. More market related in my view. Everyone has the facts in their press release from last week. $.05 per share in earnings, S1 soon. Guess the market finally caused a capitulation phase. Probably a hell of a buy, even if you don’t care about the dividend.
what is the latest on byth? do they plan on going x-div soon?
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Editor: As I understand it, they will not be going x dividend until just before Southland is ready to trade on its own. They are well into the process now. They will be responding to the first round of comments shortly as I understand it.
I still haven’t received my “Southland Div”; the stock is now .70 cents. Any news on the company? It seems like a long time to file the S1. I’m thinking of calling the Company to find out if they have me listed before the cut off date. Do you think that would do any good?
Editor: no, it wouldn’t change anything. They have filed the S1, and are in the process of getting the spin off underway. If you read my past coverage, you know I said it would take many months. As I have been saying, what you really want to look for is a new debt deal which allows them to take out the past IRS debt and the GE Capital note- that will set us up to have a much stronger offering with the S1- if it happens soon, watch for the stock to behave much better.Â
Is the company holding the Southland spinoff hostage to make their balance sheet look better? This way they could refinance their debt easier.
Editor: The two issues are kind of unrelated. Whether Southland trades on its own or not, whoever finances this deal will be financing Southland. Believe me, there is nothing this company is doing now but running their business and talking to a lot of people about refinancing their debt. Â
As per your previous answer–if the refinancing has nothing to do with the spin off why don’t they do the spin off which is 9-10 mos. overdue?
Editor: They are in the process of doing the spin off. That’s what the S1 is, but it will take some time. However, I don’t believe the S1 will yield a successful spin off without a refinancing.Â