Southridge Enterprises Inc. (PINK:SRGE) Destroys Confidence
There has been a lot of controversy around Southridge Enterprises Inc. (PINK:SRGE). A lot of that controversy stems from what the company says in its press releases.
Yesterday, after a “corporate update” SRGE plummeted 28.89% to a close at $0.0096 per share.
The market reaction seems to have been the response to the news that SRGE has increased the number of authorized shares (AS) to 1.5 billion. Supposedly that action has been taken in order to give the company “additional capital issuance capacity to allow for and facilitate future joint ventures, asset sales and or acquisitions…”
While, generally, this could be an explanation, in the case of SRGE it makes little sense. In the last year the company said it was buying back shares, and according to the company website the latest available number for outstanding shares (OS) was about 546 million shares. That was about 55% of the authorized shares, giving the company plenty of leeway should it need it.
The “buyback” itself was not what most companies mean by buyback. SRGE actually converted 400 million restricted shares into debt bearing interest.
The AS increase also seems illogical because of another of the company’s claims. SRGE stated in previous press releases that it was in talks with major gold companies for the sale of one of its properties. Supposedly for $550 – $600 million, which would give SRGE plenty of real capital to work with.
Additionally, in early September SRGE was bragging about record production and revenues. Then it said it would be filing the report on Nov. 23. It didn’t. SRGE said it had changed legal representation and it would be filing the report in the last week of November. It didn’t. As of Dec. 11 there is still no filing. Actually, there is still no filing about the new legal representation, either.
Some may think it strange, that a company claiming to have generated $3.4 million in revenues for a quarter can’t sort out its filings. Whatever is going on in the management’s minds, it’s not enough for most investors. Currently SRGE is down 5.21%.
