DUE DILIGENCE ALERT - CNEX
The following analysis is based solely on our opinion and from the information we have been able to gather from public sources:
Everything about this smells. First and foremost, you have the newly listed shell trading at a $273,000,000 market cap. As far as we can tell, these guys are a pure start-up with no revenues, no money, unknown balance sheet and an office located at the Lester B. Pearson Int'l Airport - this in and of itself lends discomfort.
From pinksheets.com:
COMPANY NOTES
Formerly=Citisource, Inc. until 4-2008
Formerly=China Shuangji Cement Corp. until 10-07
Formerly=Citisource, Inc. until 6-06
That shuffling of companies is just downright scary. China Shuangji was pumped (there's just no other way to describe it) in ANOTHER shell in February '08 from $5.00 to $1.00 in a matter of weeks (nice job) and currently sits at $0.35. So in effect, you have this shell flipping from Citisource to China Cement BACK to Citisource in a matter of 6 months. Hmmmm.
From the shareholder update:
"The company plans to own several advanced mining properties in North America that will rapidly combine a balanced portfolio of exploration and development projects with the mining expertise of its technical and managerial teams to ensure future growth of the company. The result is a company with the share liquidity and market capitalization to provide value to investors"
You can't be serious. Exactly how does this Company plan to "own" several advanced mining properties? Do they just think they are sitting out there with a For Sale sign? How does this Company plan on PAYING for these acquisitions? Our guess is they will attempt to do an equity financing at levels substantially below $1.00. We're not convinced they can even pull that off to the extent that they can raise enough to buy anything of value.
We'll concede that the float at this point is probably manageable. But it ain't gonna stay that way. You can be sure that the shareholders of this shell and anyone else that got paid with "free-trading" shares will be raining their position down upon you soon, if not immediately. How could they not..the market cap is $273MM!!!
You wanna play the momemtum game...don't leave your screen for a glass of water. These stocks were also touted as mo-mo's, but take a glance at the charts of AETE, IMGR, CNSJ, CJGH. When time's up...look out below.
Hey, if you like the Company, kudos for you. We think you can buy all you want and well-under a dollar and soon. Want to play the momemtum? Good luck. When the chorography slows and ultimately stops, it could be a free-fall.
And last but not least, even pinksheets.com is trying to warn you:
BUYER BEWARE
There is a public interest concern associated with the company, which may include:
A spam campaign
Questionable stock promotion
Known investigation of fraudulent activity committed by the company or insiders
Regulatory suspensions
Disruptive corporate actions
During the time it is labeled Caveat Emptor, any stock that is not in the Current Information category will also have its quotes blocked on pinksheets.com.
AI
