Martinas B.

Prevention Insurance Announced That Their Merger Negotiations Fell Apart

by Martinas B. March 26, 2007
Prevention Insurance (OTCBB: PVNC) announces that the merger discussions with their last merger candidate did not produce a Letter of Intent. But tried to put a positive spin on bad news with an announcement of another deal. For some reason, unbeknownst to us, the stock is up 300% today.

According to an announcement they made: Prevention Insurance has agreed to merge with Shanghai Senyin Development Company (SSDC) which is a manufacturer of pulp and paper products distributed throughout the world. SSDC claims to have revenues in excess of $50 million USD and "above average" industry profits. Prevention Insurance says that SSDC is a perfect fit that will provide a solid platform to grow international sales from. Prevention also said that the merger could be consummated in the next 45-60 days providing that all audit and regulatory requirements are met.

Here is what we think: This announcement is completely meaningless. There is no 8-k form filed, there is no letter of intent we can see, and Prevention Insurance Doesn't have any money even to finance real merger negotiations or pay for this company. Prevention Insurance has a negative networth of somewhere near 4 million dollars. Considering their pathetically weak financial position, if their ever is a deal it would probably be extremely dilutive to shareholders.

Why make such vague anouncements when their is nothing concrete?

(Or worse why should anyone invest in this.) Their last merger discussion for a public insurance holding company Prevention Insurance (OTCBB: PVNC) completely fell apart. Who was it that said, "history repeats itself".

Comments 1

1. Guest
June 11, 2009, 08:02PM

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