Joe, I don't truly undrstand this management either. I've observed their actions with WTCH (CVIA), ICLH (GECL), EESV (WAST), and CONI (CICG). All of them experienced the run-ups and fall-backs, so the pattern was easy to spot.
The overwhelming concern is on "the story" that can be told, gross revenue, overly optimistic projections. They fail to focus on executing proper due diligence when preparing for an acquisition and they only look for stock acquisitions, because it is the only asset they have.
Their whole effort is centered on "promoting the stock" and they don't buy operations that can generate cash to meet overhead expenses (you can't buy positive cash flow with penny stock).
If you study the press releases of these companies and the press releases of successful companies you can see the differences. Successful companies release news that includes facts that can be documented and verified, at least by an auditor. This management's press releases always include flowery quotes from the CEO of the company and/or the CEO of the acquisition and includes grand projections.
Its interesting to study the history of the companies in the SEC filings. Three (including WTCH) of the 4 companies I mentioned have done these reverse mergers, where they left the debt of the company in a shell that is later "sold" to someone for $10.
The patterns are there, but you have to study the histories.
AI
