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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.

3 Comments Post a comment
  1. dcreif #

    Did you read any FPVD SEC filings? FPVD was a $2M company (on a good day) prior to this deal, a shell more than anything. SRAX transferred ownership of BIGToken in exchange for FPVD stock. SRAX didn’t even think the transaction was worthy of an 8-K.

    You have to search out recent reddit posts about FVPD and BIGToken. The reddit crowd thinks BIGToken is a half billion dollar opportunity and bid FPVD to ridiculous levels. In ye olden days, this would have been a boiler room penny stock pump. The best thing SRAX can do is sell the shares as quickly as it can.

    February 7, 2021
    • Thanks, I will check out reddit. My assumption has been that the price of FPVD is wrong, that it has been bid up on an erroneous expectation that the 800mm shares will represent all the shares outstanding, the fact that it is a penny stock and so its just retail holders, and those retail holders are mostly crypto guys that don’t understand reverse mergers.

      Forget $500mm though. Right now they are pricing FPVD as if BigToken is worth $2b! It is crazy.

      February 8, 2021
      • This is what we are dealing with here.

        February 8, 2021

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