Ecomax Inc. (EMAX)

[Potse]

Reverse mergers, splits, fundamentals, psychology......

Seems your interpretation of the increase in AS, split, and name change is positive? Have you ever been in a stock similar to this and if so what was the outcome? I struggle with the move given the existing SS is already attractive in my opinion. I’ve seen companies R/S to artificially inflate the pps and to ultimately let it drift to 0 while insiders dump and/or dilute.

I don't really have any overwhelmingly positive or negative opinion regarding this particular reverse split because it is almost impossible to know for sure what might happen after the RS. Everybody has their own positive/negative viewpoints on reverse splits. Stock performance results following a RS can be varied so I don't think someone can just put a blanket positive/negative spin on the subject. There are both very real fundamental and psychological components to the subject.

I don't recall what the symbol was anymore, but I do remember a shell situation many years ago that was actually somewhat similar to the ECMT situation. The shell did a 1:10 reverse split, the post-split share structure was probably about half of what ECMT will have post-split, and it was selling around 10-20 cents. So I bought a position in this shell post-split, thinking I was going to make a nice percentage return on my money. That investment turned out to be a complete disaster for me because of nonsensical management decisions in the form of puzzling dilution/acquisitions.

Going into that investment I didn't have the slightest hint/inkling that the outcome of that shell investment would turn out as poorly as it did. Just when I thought that investment could not possibly get any worse it somehow always found a way to get worse.

The fate of ECMT will rely heavily on the actions of new management. Sometimes Chinese shell owners have a tendency to put together reverse mergers that have share counts that are higher than comparable American-based RMs. If the post-split dilution is reasonable and being done for mostly/primarily good reasons (like quality acquisitions) rather than solely for keeping the shell's light bill and the CEO's salary paid, that will give the shell's retail shareholders a decent, fighting chance to make some money. I'm willing to take a chance and roll the dice a little here.