CHID sounding very scammy to me
(And that's coming from someone who still owns a few shares.)
How many legitimate companies change industries overnight? Even worse is this swapping companies nonsense.
Imagine the following: "Yes, it's true that we here at Oracle Corp. were very high on our growth prospects just a year ago. But in that time, we've come to realize that the software business is actually darned competitive! Therefore, in order to continue to grow the business, we've decided to swap our software business for a bamboo farm! We feel it's a perfect fit because we have absolutely no experience at bamboo farming."
The CHID press release is also extremely vague with zero specifics. No link to company websites. No mention of the names of the incoming officers of the new company. Who are the selling shareholders?
Searched google for all three company names mentioned and found absolutely nothing.
One scenario that i always think about when I see something like this is that maybe the auditor said "hey, there's no way we can sign off on these numbers for the end of the year audit."
The quarterlies don't get much scrutiny and aren't generally audited. I've seen more than a few companies have three allegedly great quarters and then mysteriously re-state, or charge-off, or acquire, or change businesses when audit time comes around.
If the whole CHID thing is a scam, this swap sort of creates confusion and plausible deniability for everyone and also allows the auditor to continue collecting fees. The auditor can sort of cover themselves in the audit by saying the old business is no longer being audited and we're in the process of auditing the new one. And basically everyone buys another year.
But bottom line, you really have to ask yourself how many legitimate companies do a paper swap from being a battery manufacturer into "the wood-carved art and furniture and auto accessories business."
