EMEX - scam or fiction, not much of a difference
Emex Corporation, formerly Hawks Industries, Inc., is the holding company of North Star Exploration, Inc. (North Star), a mineral exploration company, and Blue Star Sustainable Technologies Corp. (Blue Star), a technology company developing clean fuel technologies, including fuels for use in fuel cells.
For the fiscal year ended 12/31/00, revenues totaled $75 thousand, up from none. Net loss increased 9% to $5.8 million.
Market Cap is 539 million
Float is 5.9 million shares
Debt/Equity ratio is .56
Price to Sales is 6,614 (ha ha ha ha ha)
Cash is .10/share or $2.28 million
Unless further funded, should be out of cash by end of June.
So why has EMEX gone from 6 to 22 in the last 6 weeks?
This peace of news is part of it:
biz.yahoo.com
Does this make any sense economically??
"The funding requirements of the Technologies Division for 2001 relate primarily to the construction of the first 500 barrel a day plant module referred to above, the estimated cost of which is expected to be in the neighborhood of $20,000,000. The Company has accepted a proposal from a financial institution to syndicate a combined debt and equity financing of $100 million to finance the construction of a 2,500 barrel a day plant consisting of five 500 barrel a day plant modules. There can be no assurance that the syndication will be successfully concluded."
They aim to produce a low sulfer diesel fuel from natural gas. Assuming the fuel wholesales for $1 a gallon a 500 barrel plant will produce 2000 gallons, or $2,000 in revenue per day, $730,000 annually assuming 24/365 operations (not likely). Does it make any sense to invest $20M in capital, worth $1M a year at CD rates, for a return of 3.65% less expenses???
Another interesting announcement from EMEX on March 21, 2001
"board of directors had declared a stock dividend of five percent to shareholders of record at the close of business (5:00 P.M. EST) on April 16, 2001, payable May 14, 2001, and had announced the intention of declaring for each quarter commencing with the quarter ending September 30, 2001 a regular stock dividend of two and one half percent per quarter so long as there is continuing progress in the company's development at a satisfactory rate.
What is the reason for this dividend???????
on April 12 short interest was 76,881 shares
by now I am sure that number has exceeded 500K significantly with runup.
I believe the shorts would have to pay this dividend and buy shares to do so.
(someone please correct me if I am wrong)
So, 1 million shares times 5% is 50K that would need to be bought.
Average volume is 34K
Sounds like an imaginative attempt to squeeze the shorts to me.
I am also sure the insiders or affiliated parties have been buying small lots to drive the stocks higher and putting more pressure on the shorts.
I know of at least 4 people that have had their shares called in the last week.
Probably someone is buying to create a hugely inflated market cap that would allow them to price a private placement at a substantial discount and still get several times over what the company is worth. Let's not forget that EMEX was priced at $1.50 at the time of the merger.
In my eyes this is a total scam.
I dont believe EMEX will ever receive any funding, and even if they do the business model doesnt make any sense and the fundamentals are almost as bad as GENI.
In conclusion,
Shares are hard to find, but I believe Etrade has some.
Wait until after the May 14 dividend payable date.
Probably tuesday start shorting.
I would recommend starting with a 1/4 position and averaging up every 20-25%.
Allocation is extremely important on scams.
BTW, for the record:
I had shorted EMEX 4 weeks ago at 13.37 and covered 1/2 at 11 and 1/2 at 9.25
I have not been back since. I have been patiently waiting for the dividend date.
Good Luck
Michail
1 final note:
A few of the ideas in this post I borrowed from Yogalad - a friend and member of the POSAlert Club.
Many thanks Yogalad.
You da man. |
