VHGI Holdings, Inc. (PINK:VHGI) Ascent Interrupted
The climb that VHGI Holdings, Inc. (PINK:VHGI) enjoyed after their April 1 press release was abruptly cut short. After going up in leaps and bounds, the stock lost nearly 30% in just two sessions.
Traders’ hopes and expectations were buoyed by the news released by the company on the first day of April. VHGI announced that it had completed its first delivery of nearly 5 thousand tons coal to an electric service supplier in Indiana. The release also contained estimations about the future output amounts from VHGI‘s mine – 20 thousand tons per month, starting May 2013. The second delivery was ‘targeted’ to happen on April 10 and with no press release for it, it may or may not have taken place.
VHGI stock surged on the news and traders were obviously pleased to see that things are indeed moving along. Discussion boards are buzzing with traders claiming that the company is still hugely undervalued at its current levels. The latest financial report from VHGI is a quarterly for the period ended September 2012 contained the following:
- $704 thousand in cash
- $53 million in current liabilities
- $122 thousand in quarterly revenues
- $1.3 million in quarterly net loss
Sadly, this is the most current financial information available, as the company is late with its yearly report and only has a notification of late filing in its place. With no update containing hard information, traders have only press releases to rely on, and those are not the best source of information for investment decisions.
While VHGI seem to have 250 million common shares authorized as of the present moment, the financing secured that helped them push through with their mining operations revolves around preferred shares convertible into common shares. A Schedule 13D details that in case VHGI‘s CEO decided to exercise all warrants and rights of acquisition, the company’s outstanding common shares number would have to be as high as 1,466,251,882.
While it’s admirable that VHGI seem to have got their coal mining project up and running, investors may want to wait for the company’s yearly report to see if things really are changing for the better. VHGI stock is currently 18% down in early trading.
