One shareholder's experience with FAMH... I received this via e-mail today from a lurker on the thread. I present this without editing or comment.
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From Jamie Orr:
Today I sold 69,000 shares of FAMH which I accumulated during November & December at higher prices.
I originally bought this stock because it posted an amazing $.06/share for the third quarter of 1997, and $.12/share for the first three quarters. At the time we were assured that auditied financials would soon be out and I assumed that no company would be foolish enough to misrepresent earnings so close to an audit. (That was my first mistake.) For a penny stock, FAMH seemed incredibly safe with huge upside potential.
In the absence of audited financials, an investor can only gauge a
company by the reasonableness of its claims, and the credibility of its
officers. I should have compared FAMH to the industry averages before buying shares, because if I had, I would not have invested. It simply isn't reasonable to believe they can be 6 times more efficient than their competitors.
All that was left then was Ira's credibility, and that gradually
dwindled away over the course of many details. One of his worst offenses was in one of his conference calls when he stated that the third quarter earnings had never been $.06, but were in fact only half of that. Instead of offering an explanation, he stated that the $.06/share was simply "feedback" from the internet.
I know that many of you have made excuses for Ira, like "With all the shares the company was issuing, perhaps he didn't know how many were in the float during the third quarter until much later. However, I find it hard to believe that two months after the end of the third quarter that Ira would miscalculate the third quarter float by 50%.
The ironic part of this story is that most investors would have been
thrilled with $.09 for the first three quarters, especially since the company was putting all kinds of money into opening new offices. But once it became apparent that "what Ira giveth, he can just as easily take away, " who knew if even his latest numbers were correct.
About three weeks ago, I started corresponding with Ira. Altogether I wrote him five times and each time he promptly responded. Unfortunately, he is a master of the non sequitur. At least three times I asked him why the Nov. 24 press release was so far off, and each time he wrote back on an entirely different subject.
The final straw was this week when the press release explaining the $.11/share for the year was delayed. (For newbies, this press release had been promised in another press release exactly one week earlier.) On Tuesday, after an entirely different press release concerning the $12MM equity position came out, I called Rob at FAMH, who really blew my mind by saying that the press release that had just been issued was the only one he knew about. According to Rob, when he told callers on Monday that the company was postponing the press release while they waited for additional
information, the "equity position" press release is the one he was talking about.
At that moment Ira came into Rob's office and Rob tried to put him on the phone, but Ira got a little heated and I clearly heard him say, "I don't speak to shareholders." (At that point he had no idea who I was.) Finally Rob prevailed and Ira took the phone. I immediately asked him one question, "Where is the press release concerning the $.11/share." He didn't say a word, but simply gave the phone back to Rob and again repeated, "I don't talk to shareholders."
A few minutes later, Ira called me back and immediately began to
lecture me about how people on the internet have no right to "dictate" to him when he should issue press releases. I attempted to explain that I was only asking for the one one he had promised in writing one week earlier. He got more frustrated with me and offered to buy back my shares at one cent over the ask. I accepted his offer and he told me "Rob will fax you the instructions."
A couple hours later, I had received nothing, so I called Rob. He said he was taking care of it. I asked if he needed my brokerage information and he said that would be a good idea, which sounded strange to me, so I asked if he'd ever handled a transaction like this before. He said many times and that they were usually completed within 24 hours.
By the middle of the next morning I still had not received a fax and
since I assumed they would at least need my signature on an agreement, I called back and spoke to Ira. He said the paperwork was on his desk and he would handle the matter.
It's now been two days and I've yet to hear back from them. I
understand they are probably too busy to place my paperwork on a list of priorities, so when the price rose today, I simply sold my shares in the usual manner through my broker.
This is a rather long-winded story of frustration. I wonder how many other investors have similar stories. While I think it entirely possible that this stock may go up, it's become no more than a crap shoot. Ira claims the company made money last year, but the numbers he has given us to work with are unreasonable and his credibility is gone.
Good luck to you all. BTW, I am posting my e-mail address so that you will not accuse Little Engine of writing this post. "Connriver" stands for connecticut river. My ISP is in Vermont, while Little Engine lives in Chicago (I believe). James.Orr@connriver.net
I'm sending this through Little Engine because I believe he will post it.
Cheryl only posts the positive comments I send her.
Jamie Orr |
