I cannot think of too many companies that make a habit of posting their outstanding share count in each and every press release. What I do know, however, is that the share count is certainly IMPLIED in this release and many of the others out of Veltex.
Am I wrong in asserting that by saying you will earn $3 per share and that net income will be approximately $7 million that approximately 2.3 million shares are still outstanding? Now, I'm not saying that the company has not issued more shares or has a diluted share count that is significantly higher, but somehow something is not adding up.
There are a number of possibilities:
1) The PR's are the truth, the company is successful on a small scale, but is having trouble getting an audit done because they never realized how complex and/or expensive the process is when you're dealing with a company operating in multiple countries, doing acquisitions, seeing growth, etc.
2) The PR's are a total scam. There are no revenues, no earnings and this is a grand pump and dump. If that's the case, however, Mr. Matin who has not had the greatest past is very likely to take a fall this time. It will not be the SEC, but rather the courts.
3) There is a mixture of truth and fiction. If the business is in fact generating revenues, earnings, etc. -- I would not be shocked by a bad deal for shareholders, a private placement that could have dilutive effects or some other alternative financing vehicle that is toxic. However, even if its 6 million shares, isn't that still more than $1.10 in earnings per share. At a PPS of just $2.00, that's not so bad. There are trust issues, yes, but this is a pink sheet stock...its a lottery ticket to begin with. Its like an option with no expiration -- you have to know it will multiply or go to zero. Matin stands to lose the most, however, if this is all a bunch of lies.
OK, there are obviously other possibilities. Clearly there's some shadiness going on at Veltex. However, I also know a thing or two about textiles, the promotional products business, surf apparel, etc. All are markets seeing major changes now. Mr. Matin is either very bright or very, very stupid. Only time will tell which is correct. There's more to look into though than the share count. The press releases are full of other information that can be checked, cross-checked, etc.
