More than 10 years ago I was working in, and a part owner of, a company that was traded on the OTC BB. Specifically, my shares were restricted shares under SEC Rule 144, and the shares were not in any online account that I had access to. Long story short, the company ran out of money and ceased doing any business. It didn't file anything to the SEC and didn't post any public information about itself anywhere as far as I know, for several years. The company still showed up in stock listings in for example Yahoo Finance, and a tiny amount of trades were made on the OTC every year.

Now, several years later, there is much activity on the OTC and the stock price suddenly shoots up. I start looking in to it, and see that the company has filed some new filings at least on otcmarkets.com. According to the filings, the company has a new name, new directors, and also new owners. All previous owners seem to have disappeared, the new CEO owns 99% of the shared. Apparently, I no longer own any shares in this company.

Can someone explain how this is possible?

More details: the company is a corporation registered in Nevada.

  • 7
    It sounds like they declared bankruptcy and reorganized, but without specific details it's impossible to know for sure. Another possibility is that their bylaws allowed them to issue more shares, diluting your stake.
    – D Stanley
    Commented Jun 12, 2023 at 13:57
  • 6
    Is it the same company (and not maybe a glitch or reassigment of the ticker symbol)?
    – Solarflare
    Commented Jun 12, 2023 at 15:05
  • Maybe resulting from reverse merger of another business into what had become a public shell corporation? See investopedia.com/ask/answers/08/reverse-merger-ipo.asp Commented Jun 13, 2023 at 23:43

1 Answer 1


I think I've figured this out:

  1. Any shareholder can apply to be appointed custodian of a company that hasn't filed required reports, hasn't held annual meetings, and whose officers and directors cannot be contacted. Appointment of custodian
  2. Once you are the custodian, you can pretty much manage the company as if it was your own. Specifically, you can make the company sell shares in the company to finance its operations. Obviously, you sell them to yourself to get the majority share of the company. Issuance of shares
  3. You hold a shareholder meeting (of which probably no-one except you knows about) and elect yourself or a friend as president of the company. Then appoint a CEO of your liking. Actually, once you own a majority of the shares you don't need to hold shareholder meetings, at least in Nevada. Forget the shareholder meeting
  4. Do a reverse stock split (but keep the par value of the stock low) to dilute existing shareholders (yes, the stock split in itself doesn't dilute other shareholders, but makes it cheaper to get a larger share of the company by issuing new shares). Since you control the company, you can keep issuing new shares to yourself at par value. Stock split

So I technically still own a part of the company, although a very small one by now. It might be difficult to prove that, though; the original shareholder list might have conveniently disappeared at some stage.

Yes, this is what actually happened, not a theoretical explanation.

  • Point 4 does not make sense in your situation - a reverse stock split would affect all shareholders and would not change the % ownership of any shareholder. All it does is change the per-share price (par value is largely meaningless also except for the accounting). The others seem very sketchy (even fraudulent) as well. Did you find out that this is what actually happened or is this a theoretical explanation?
    – D Stanley
    Commented Jun 13, 2023 at 19:37
  • 2
    Also point 3 is potentially illegal. All shareholders should be informed about all shareholder meetings. Commented Jun 13, 2023 at 21:19
  • 2
    @DStanley: A reverse stock split does change % ownership, in the process of rounding the new "number of shares" down to the nearest integer. However, the "lost" fractional share should be paid out in cash.
    – Ben Voigt
    Commented Jun 13, 2023 at 21:59

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