I think you made a good buy, because of where EFOI may be in 12 months.
I really don't know who all of the sellers were today, however, I do think they are thinking as I am that this is going lower, before it finds a new plateau to hang out at until they file their next 10Q.
I'm not really sure how low EFOI can go, so trying to pick the bottom is a fools errand. I'll be buying more soon too. Maybe at $4.50. I don't want to commit a lot of money to EFOI because they have Zero institutional investors. It's not true institutions won't buy penny stocks. I own other pennies with institutional investors. Generally, it's mutual funds that can't take positions.
I felt we would drop to $4 just based on the math, but the PPS may be supported because of the "closed deals" and what I at least perceive they are lining up in the pipeline.
EFOI has a few days to go until the offering is expected to close on August 11, 2014 and is priced according to the filing at $4.50. If the 1.1 million shares don't get gobbled up, the PPS very well may drop to near $4 before it's over.
I feel differently about the management then some others on this and other boards.
There is the contingent I disagree with but am willing to keep an open eye towards (since I've watched other penny operators do the same thing), who basically feel management are crooks running the company for their own self centered gain at the expense of shareholders.
I think management is savvy, made good deals for themselves based on a risk Vs benefit calculation, and are doing everything within their capability to finally expand EFOI's major customer base beyond the Navy, eliminate debt, build out their manufacturing capability and increase their raw and finished product inventory to meet an increasing demand they perceive they have created.
The NASDAQ listing will increase visibility and should they execute on several of these major deals in the pipeline, EPS will make a sudden swing into the black, supporting a new PPS based on fundamentals. If they can keep debt at Zero, ship and collect on the new deals and line up a few more major customers (schools), they very well may post a 25¢ - 50¢ annual EPS supporting a PPS near to where it is today +/-. If they do that, institutions will start taking positions.
Management positioned themselves for a "S _ _ _ or get off the pot" moment. They have the money to succeed. They are either going to do it NOW, or all that will be left to write in the their story will be the Obituary. That's the point I think they reached, at least for me.
I think they created the perfect position for themselves. If they can't get into the black, the PPS will really slide. There won't be any support for a penny stock that performs like a penny but is priced like a company making real money.
Their time has come. I don't want to give them multiple chances (with my money) as most penny stock management teams keep asking for.
So I will expand my position, but I won't be too exposed.
