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Shell Summary for Sept. 23, 2014

2014-09-23 20:06 ET - Market Summary

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by Stockwatch Business Reporter

The TSX Venture Exchange fell 2.91 points to 925.18 Tuesday. Ron Schmeichel, a busy and successful shell-maker in Toronto, has a new shell, Mira IV Capital Acquisition Corp. (MRY), which arrives on the TSX-V Wednesday. It is the third capital pool shell to list in September and the 14th this year. Richardson GMP Ltd. sold Mira IV's initial public offering of 10 million shares at 10 cents for $1-million. The broker also sold IPOs for two other capital pool shells that listed earlier this month, Benoit Chotard's Orletto Capital Inc. (OLE) and Michael Thomson's Rodeo Capital III Corp. (ROP).

Mira IV has 20 million shares in escrow that sold at five cents for $1-million. The exchange restricts seed share capital raised at less than the IPO price to no more than $500,000, but it has discretion, which it used for Mira IV. Mr. Schmeichel, the shell's 47-year-old founder and president, is the largest shareholder of Mira IV with eight million escrow shares. He manages a Toronto shell-manufacturing shop, JJR Capital Corp., which has packaged many shells and listed some well-known companies on the Toronto Stock Exchange and the TSX-V, including Steve Hudson's Element Financial Corp. (EFN: $13.20) and Doug Emsley's Input Capital Corp. (INP: $2.30). We have discussed Mr. Schmeichel's record in the shell sector many times, most recently in the Shell Summary for July 25, 2014, noting that IPO shareholders usually can sell their shares after one of his QTs at a profit, but their profits are limited by rollbacks to reduce the equity of the shell's shareholders in relation to the target. Not including Mira IV, Mr. Schmeichel has listed 15 capital pool shells and completed qualifying transactions for 14 of them, of which nine were successes for IPO shareholders. He has one other capital pool shell, WB III Acquisition Corp. (WXX: $0.08), which went public last October with a 10-cent IPO but has yet to find a QT.

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