This is a trade alert on TRxADE HEALTH, Inc. (MEDS). It's up 38% today to around $11.50 in mid-morning trading on the announcement of a special cash dividend of $8 per share. This huge news means that the floor is $8.00 but the upside is much more than that. This distribution was made possible because the company sold its web-based market platform for $22.5 million. This deal comes with a clause that could see an additional $7.5 million payment, for up to $30 million. MEDS has $5.2 million in notes payable. Net of this amount, the market cap should be at least $17.3 million or about $14.30 per share with only 1.2 million shares outstanding. If the $7.5 million payment comes to fruition, that net cash value increases to $20.50. With a float of only 452,000, this is one of those rare opportunities where a retail trader can trade a low float stock with a guaranteed floor and no chance of a rug-pull financing.
At around $11.50, there is only $3.50 of downside possible but the upside is technically unlimited in a squeeze situation with that kind of float. Post-distribution, it's unlikely that the stock will drop and stay at $3.50 as it will still be trading well below net cash value and have some operations remaining. This looks like a trading opportunity with strong risk-to-reward imbalance to the upside. A rarity in a stock with such a small float.
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