Elmetwally: As always, "buyer beware".
There are several ways the stock price could rise, IMO.
1) Demonstration of validated positive cash flows and profits. So, far, none has been seen, which is hard to believe in a business with low start up costs, low overhead, essentially a "cost plus" business, and ?? $40 million or so in revenues. (remember, they essentially "lost" (or never had)millions or tens of millions of revenue dollars over the past couple years.
2) A sweeping change of the "top most" management giving a glimmer of "hope" for the future.
3) A reverse stock split. Of course, you would have fewer shares afterwards, and possibly farther for the share price to fall later. That would equate to lost capital from your perspective. The evidence so far indicates FAMH has a voracious craving for money from investors, since this form of raising money is almost free. Where the money goes, is anybody's guess. Approx. 75 million shares have been issued so far, and there is little or no equity in the company. A reverse split will pump up the price so the unissued shares (that, I understand, unlike issued shares, are not affected by the reverse split) could bring in more cash. In other words, based on $0.04/share today,
24 million shs. x 0.04 = $960,000 but
24 million shs. x 0.40 = $9,600,000 (i.e. 1:10 ratio) or
24 million shs. x 1.00 = $24,000,000 (i.e. 1:25 ratio) or how about
24 million shs. x 1.60 = $38,400,000 (i.e. 1:40 ratio)
Who needs to have a business, when they can get free money like this. As Forest Gump seemed to indicate, "what a racket"! AA & family keeps their salary and lifestyle.They also float on the backs of investors for a longer period. Unfortunately, without better management, and positive results from ops, your shares will probably decrease in value, IMHO. There are investors, and the Company. So far, the Company has made absolutely sure it has taken care of its welfare first.
If they couple a reverse split with an increase in authorized shares, I see it as a double negative, and could mean, on one hand, they don't know how to generate profits.
4) A string of PR hype that sucks in novice investors, eager to get on the train RIGHT NOW, who have not done their own due diligence analysis.
5)A string of validated PR hype that truly, accurately, and definitively indicates management and the business have changed for the better. This one is hard for me to imagine since there appears to be a revolving door for management types at all levels, and a void of positive business news, quarterly financials, etc.
In the end, as always, make your own assessment, and question everything, including all the posts found here. I don't know where this stock is going. I can only read the trail "to the edge of the cliff". I understand, there are a lot of investors' bones at the bottom . |
