Don’t let me paint too rosy of a picture with my theory. Going from a shell to a viable and profitable business then paving the way for an uplisting to a major exchange has never been easy, though I am arguing the current macro conditions are making it a more attractive path to pursue than ever.
The idea isn’t necessarily that all or even many of these shells will ultimately succeed in the long run, but all it will take is a few to really highlight the potential here, and that will in turn create a feedback loop which ushers in more capital that will flood everywhere. When one ticker is able to go from a shell to a successful merger and then goes beyond it’s last secular high point (often 2021), that opens the path for others to follow. Once a few of them start to do the same thing, the flood will begin and that rising tide will inevitably raise most of the ships. The more capital diverted into these shells, the better the odds are that the legitimate businesses and CEOs will be able to leverage that into success, which in turn sparks more capital to flood in. It’s easy for me to envision this turning into a self-reinforcing feedback loop thanks to the extenuating circumstances at work here.
My theory is rooted in the idea that the shells with the cleanest charts have the most value because they offer the best chances for a successful path towards growth (and by extension short squeezes). A clean chart with a secular bull trend means less resistance to fight through, less resistance to fight through means dilution gets absorbed by the market more readily. The more readily the dilution is absorbed, the less shares have to be issued to accomplish the necessary objectives towards growth.
Even the cleanest charts will still have to battle to accomplish their goals, but I believe they will have the best chances for success. Ultimately we’re trying to find the long term winners, even if there ultimately end up being only a few. That said, the copycat nature of the markets means that it could only take a few rousing success stories to fuel a huge bullish flood of capital into most OTC shells. That in itself could be enough to spark short squeezes and massive chaos as 2021 highs get broken left and right.
You never know which tickers end up being the biggest runners out of the bunch, but just like 2021 this phase is likely to spread the love around quite a bit. If you focus on the cleanest SET chart patterns which get married to the best fundamentals (management, merging companies, etc), I think you’re going to do quite well.