PSIX- I would love to get a rational answer
to these questions. First, why did the stock trend down from $3 to $2 for over a year, from April 2023 to May 2024, despite the company posting unreal Q2 and Q3 2023 results ? I mean both of these quarters had great results, largely because of increased demand from their Higher Power System, and specifically from higher margins sales of their enclosure packaging products. In fact in Q3, 2023, the company showed $17.7M more in that division, which is almost exactly the same as the $17.1M increase in that same division in Q1, 2024, also from higher margin sales of their enclosure packaging. Yet after Q1, the stock price went from $2 to $13 in weeks !
Now Nelson said it was because their debt came down a lot over the last year, and then they got refinanced, and investors were no longer concerned the company would go bankrupt. So in other words, he suggested that investors were selling off the stock, even after a great Q2 and Q3 2023, because they were concerned the company wouldn't be able to pay off their huge debt due by March 2024, and that they'd go under. However after looking at the latest refinancing, they were only given an extra year, till March 2025 to come up with $130M, and an interest rate around 12%. So my question is, why are investors not worried now about this huge debt coming due in 8 months, when they were worried after Q3 2023, with the debt coming due in 6 months ? I mean it makes no sense to me that investors woudn't still be super concerned.
Lastly I have no idea how PSIX payed off $80M of their debt in 2023 down from $210M to $130M, when they only posted Net Income of $7M in Q1 2024 ! Either way, I have no idea how the company could possibly pay off more than $20 to $30M or so of debt in 2024, so how is it that investors are so much less nervous now as to rally the stock over 500% in a month or so ??? To me, there is something amiss here with this China owned pink sheet stock.
AI
