I follow with interest the discussions on this forum if SIAF is a scam or not. I am not yet convinced the company is legit and, accordingly I have not invested as much as I otherwise would have done. The main argument for it being a fraud, is of course the constant issue of more shares at ridiculously low prices. No rational investor would sell a stock at such a low valuation. But there is one big seller. The company itself continues to issue more shares in order to pay suppliers. Accordingly, it is easy to think that the company is a scam. On the other hand, it could be legit and it is just the financing strategy that has collapsed.
If the value of the company had been reflected in the share price, we wouldn’t have been so upset with this kind of financing.
I saw some comments that more photos and videos from fishing and farming operations could make the investors more comfortable with the reported numbers. One should have in mind that a large part of revenue and profits emanates from service contracts. Photos and videos will not say very much from this source of income. If the reported profit are for real it will show up in the balance sheet, both as an increase in equity as well as in assets. It is the job of the auditor, to check that the assets are for real and valued correctly. Let’s hope he has done his job properly.
Looking at the Q1 report, the profit for the period resulted mainly in a similar increase in accounts receivables. So far, SIAF has not reported any loss on accounts receivables.
My main concern however, is that Mr Solomon and other founders of the company have full voting power through their preference shares. If they want to deceive us other shareholders by selling the entire business operation at an unfavorable price they could easily do so.
As the company is looking into bond financing, I hope the dilution from new shares has been reduced in the second quarter. If a bond deal in not materialized, SIAF should try to get credit from their suppliers instead. One should think that suppliers would be more pleased to earn 10 to 12 % interest per year instead of receiving a share that falls steadily in value.
