Details of the planned merger agreement between Ediets.com Inc. (DIET) and As Seen On TV, Inc. (ASTV) were finally revealed after the market close Wednesday. According to the 8-K filed, upon the closing, which is penciled in to happen in Q4, 2012, shareholders of DIET stock will receive 1.2667 shares of ASTV stock. Now it doesn’t take a rocket scientist to figure out that more than one share of a 76 cent penny stock in exchange for every former NASDAQ listed, 33 cent penny stock owned is worth more than a penny to you — try nearly 200%.
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DIET Stock Chart
Market Cap: 4.74M
Close: 0.3311, up 0.074 (28.78%)
Average Trade Size: 2,266
Issued and Outstanding: 15,060,514
Approximate Float: 4.23M
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DIET is one penny stock you want to pig out at the open Thursday. eDiets.com Inc. reported on their last 10-Q that, on August 10, 2012, the Company entered into a letter of intent with As Seen On TV Inc., a direct response marketing company, whereby the Company agreed to acquire all of the Company’s outstanding shares of common stock in exchange for 16,185,392 newly issued shares of ASTV stock, representing an acquisition price of approximately $0.80 per share of the Company’s common stock.
The formal agreement and planned merger was released after the market close Wednesday. According to the detailed 8-K filed (see here), the total merger consideration to be issued will be 19,077,252 shares of ASTV stock. Based on the 15,060,514 shares of the Company’s common stock that the Company contemplates will be issued and outstanding at the time of the Merger, each share of the Company’s common stock would convert into 1.2667 shares of ASTV stock.
What is As Seen On TV getting to add to their $400,231 revenues reported for the three months ended June 30, 2012? How about an established Company that recorded revenues of $5.63 million and $12.58 million for the three and six months ended June 30, 2012, respectively, versus $5.63 million and $12.17 million for the same periods in 2011, respectively. Translation: ChaChing!
About DIET Stock
eDiets.com, Inc. is an established Company focused on developing and marketing Internet-based diet and fitness programs. The Company markets its products both to consumers and to businesses primarily in North America.
Click here to view the SEC filings for DIET.
About ASTV Stock
As Seen On TV, Inc., and its operating subsidiaries, market and distribute products and services through direct response channels. The Company’s primary channels of distribution are through television via infomercials (28.5 minute shows), short form spots (30 seconds to 5 minutes) and via shopping channels such as QVC and HSN.
Click here to view the SEC filings for ASTV.
Bottom Line: ASTV was already a sexy, long penny stock. Now that they are formally acquiring all of eDiets’ DIET stock, ASTV stock just stepped it up a notch by adding approximately $25 million in revenues to their annual top line numbers. Buy DIET at the open, as much as you can, with the understanding that the value was estimated t be at 0.80 when the two Companies signed the LOI.
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