Dead Money Comes To Life

Back in May of last year, I wrote about Orphan Fund(s).  These are the the small investments in our RSPs that don't seem to belong.  On occasion, hopefully not often, our trading accounts hold an orphan stock or two which we tend to ignore as they're dead in the water.  I held such a stock until December 3.

Four years ago this month I heard of a small company that was destined for great things. National Challenge Systems has operations in Ontario and BC. The principle business is collection and disposal of restaurant grease and other organic wastes.  Had I done my usual research I would have passed. Firstly, it was a penny stock which I avoid. Secondly, nobody had anything good to say about the company. Posters on Stockhouse.ca expressed great disappointment with senior management of the company. Be that as it may, I had some money in my trading account and proceeded to buy thousands of shares at an average price of .095. Yup, nine and a half cents.

Over time a few things happened. The share price gradually fell off to the .05 - .075 range. The shares were delisted from the TSX and listed on the Venture Exchange. The company did a one for twenty reverse split turning my thousands of shares to hundreds of shares. Investopedia.com has this to say about reverse splits; "firms do it to make their stock look more valuable when, in fact, nothing has changed. A company may also do a reverse split to avoid being delisted."  Based on the share consolidation my acquisition cost was now $1.95 per share.  The day of the consolidation they traded at $1.30.  Not good!

Somewhere along the way, the company changed its name to Organic Resource Management. Changes were implemented, which on the surface at least, appeared positive.  The range this year has been from a low of .95 to a high of $1.80.  Any time it traded for $1.80 a couple of hundred shares would change hands and then it would drop back with the next trade.  The volume was always low and many days there were no trades at all.  Dead money.

Holding Organic Resource (ORI) wasn't fun.  So, how does one resurrect dead money?  Me, I calculated that I needed $2.04 to get all my money back including all fees.  Each week I placed a sell order, good through the following Friday, at $2.04.  Each week it expired without being filled.  As I don't sell at a loss, it appeared that I was destined to hold ORI shares for the foreseeable future.

On December 3, after selling the coal miners I placed a buy order for more BMO and RBC shares.  I refreshed my 'Order Status' page every few minutes to see if either of my buy orders had been executed.  The bank shares were recovering from earlier lows so I wasn't hopeful.

Suddenly with just a few minutes left in the trading day my sell order for ORI was filled at $2.04, a new all time high!  My guess is that someone placed a buy order at 'market price' assuming the order would be filled at around $1.75, which was the last quoted price and the only shares available on the sell side were mine at $2.04.  Bang!  I had my money back.  Goes to show, you can't ignore things in your account no matter how stagnant they appear.