Research: A Question for the hive mind on SRAX
My question is quite simple. I am clearly misunderstanding or overlooking something but I do not know what. I know there are a lot of smart readers that read this blog and like to research. So here is one that stumps me.
According to the January 27th press release that SRAX put out, and I quote: Force Protection (FPVD) issued SRAX, Inc. (Nasdaq:SRAX), the parent company of BIGToken, an aggregate of 149,562,566,584 shares of common stock in exchange for 100% of the issued and outstanding shares of BIGToken.
When I look at the share price of FPVD right now, it is currently ~$0.02. It has been as low as $0.01 lately.
If you take this at face value (which I do not think you can), it would mean that SRAX’s ownership of FPVD would be: 149b x $0.02 = $3b
Obviously this can’t be the case. SRAX has a market capitalization of about $60mm.
I have read all the documents. I have tried to talk to their investor relations. I have tried to understand if I am missing a zero somewhere, if there is a share consolidation I am missing, or if there are different share classes I have overlooked. I still can’t figure this out.
What am I missing?
Update: I found another piece of this, but it still does not answer my question. SRAX did announce a special dividend in September 2018. That special dividend entitled holders of SRAX stock and convertible to a revenue participation in BigToken:
” Management anticipates that the holders of the Special Dividend will initially represent approximately four percent (4%) of the aggregate participation of the revenue share and will be subject to further dilution as BIGtoken is capitalized.”
I read through the associated documents to see if the participation is more – I mean it would make sense if the special dividend had already spun off much if not all of BigToken – that would clear up why the share price and BigToken seem so misaligned. But I do not see any further interest. A 4% revenue interest is a decent take, but it would not account for the discrepancy I described above.