Michail, nice EMEX call!
EMEX - By Carol S. Remond
> A Dow Jones Newswires Column
>
> NEW YORK (Dow Jones)--News of a significant financing deal is often
all
it
> takes for investors to bid up the stock price of a little company
that's
> trying to get bigger. The news is even more potent when it is a major
Wall
> Street firm that lends its name to the deal.
> That's appears to be exactly what happened with EMEX Corp. (EMEX),
a
very
> small mineral exploration company whose thinly traded shares have
> skyrocketed more than 180% since the company announced in early April
that
> it accepted a $100 million project financing proposal that, according
to
the
> announcement, appeared to have been arranged by Credit Suisse First
Boston.
> Its market capitalization zoomed to around $840 million.
> There's only one problem: Credit Suisse First Boston says it never
inked
a
> deal with EMEX.
> On the surface, the size of this financing and Credit Suisse's
involvement
> seems odd enough. For starters, EMEX has booked less than $380,000 in
> revenue for the past three years combined. Over that same period, it
lost
> $13.8 million.
> Before the announcement, the company still had a somewhat healthy
market
> capitalization of around $215 million. That said, it would seem
unusual
that
> a major Wall Street firm would get involved with such a small
company. And
> if it did get involved, it should seem strange it would arrange a
loan
worth
> half of EMEX' market capitalization.
> This peculiar story begins on April 9 when EMEX issued a press
release
> announcing the $100 million in financing. In its press release, EMEX
said
it
> "has accepted a proposal from a financial institution to arrange
syndication
> of $100 million in project financing" to build commercial plants that
will
> produce clean-burning fuel. In the next sentence, the company said
"the
deal
> was arranged through the efforts of Credit Suisse First Boston, and
is
> contingent on feasibility studies and due diligence." The headline of
the
> release trumpets the $100 million syndication proposal.
> EMEX went on to point out the importance of this financing. "Our
> technology's potential has attracted significant capital, despite a
> relatively poor market environment," said Chief Executive Walter W.
Tyler
in
> the press release.
> If EMEX has attracted significant capital, it's not from Credit
Suisse.
> "CSFB isn't providing any loan to EMEX or underwriting or placing
any
> securities on behalf of the company," a Credit Suisse First Boston
spokesman
> said. The spokesman said the Wall Street firm sent EMEX a latter on
May 18
> asking management to clarify the facts from the press release.
> An EMEX official disagrees. He says EMEX officials met several
times
with
> CSFB employees to discuss financing. They later led the company to
the
> ultimate lender.
> Credit Suisse officials don't dispute that some discussions took
place.
> According to people familiar with the matter, the financing
discussions
> began after a Credit Suisse private-client broker contacted a senior
> executive at EMEX to see if the company was interested in any
services the
> Wall Street firm had to offer.
> EMEX was interested in securing some financing. The broker promised
to
> pass that information along to the firm's investment banking unit,
people
> familiar with the matter said. After one meeting with EMEX, Credit
Suisse
> investment bankers turned down the financing proposal. CSFB then
passed
> along names of other financial institutions that might be interested
in
> helping EMEX, including a company called Fieldstone Capital.
> "We found Fieldstone through them (Credit Suisse First Boston),"
said
> Stuart Schwartz, an EMEX attorney.
> "CSFB isn't doing the financing but had a role in bringing us
together
> with Fieldstone. If people read more into that, then they shouldn't
have,"
> said Schwartz.
> The company lending the money, Fieldstone, was not mentioned in the
April
> 9 press release although the better-known Wall Street firm that
passed
along
> the name of Fieldstone figured prominently in the release. "We
weren't too
> anxious to make the name of our financing source available to our
> competitors," Schwartz explained.
> Fieldstone officials couldn't be reached for comment. Schwartz said
EMEX
> so far has not received any money from the syndication commitment.
> EMEX shares closed Wednesday at $26.40, down $2.86, on volume of
88,700
> shares. The stock has recently attracted the attention of short
sellers.
Its
> short interest went from 921 shares as of March 15 to 76,881 shares
as of
> April 12.
>
>
> ****************************************************************
> Bear Stearns is not responsible for any recommendation, solicitation,
> offer or agreement or any information about any transaction, customer
> account or account activity contained in this communication.
>
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