Yesterday, I purchased 900 shares of Color Imaging Inc. (CIMG.OB) for my son’s Coverdell ESA. I purchased the shares at $0.90 with a limit order. The total cost of the shares was $816.95 including commissions.
Color Imaging is planning to go private by conducting a reverse stock split and cashing out any remaining fractional holders after the split by paying them $1.10 per pre-split share. The exact ratio of the reverse split has not yet been determined, but it is proposed to be either 1,500 to one, 2,500 to one or 5,000 to one. The vote date for passing this proposed transaction is September 19, 2005.
I expect to receive cash for my shares within about two months given how soon the vote date is. I only purchased 900 shares, because I did not have sufficient cash in this account to purchase more. My expected profit from this transaction is $173.05, which is a 21 percent gain on my investment.