Pump and Dump, page-7

The lack of liquidity on these sort of stocks leads to unrealistic valuations both on the upside and downside from time to time. Based on Annual revenue of $300- million, assuming it can get back to earning 10% as profit this should have a market cap well above the $300- million mark. 9 months ago they were able to raise $50- million at $2.00 per share, valuing the company near the $500- million mark. Below 20c we were closer to $50 million for the entire company including the cash, and after today we are near $70- million. At $300 million market cap we would be valued at about $1.20 per share. This stock reminds me of API when it was in the 20c range a few years back, now it gets above $2-. Same goes for PBG when it traded below 20c although that shot to $1.50 then collapsed and bounced around a few times before private equity made a full takeover recently above $1-. If SRF can iron out the current issues then it is likely to be back above $1- and a multi bagger. Who knows, Mr Justin Cameron and his Private Equity mob may be waiting to pounce with a short term low ball offer which would be above 50c. He already has indicated that is the reason he resigned a few months back.


To quote 10 March 2016 announcement:
SurfStitch Group Limited (ASX: SRF) today advises that Group CEO and Managing Director, Mr Justin Cameron has submitted an email to the Chairman stating his resignation from all positions with the Group with immediate effect. The Company understands Mr Cameron is pursuing an opportunity relating to a potential acquisition of the Company in conjunction with private equity.

The share price was $1.40 when this announcement was made.

I am not expecting this to be that value immediately but with a decent time of holding it will probably eventually get there so these entry prices are awesome. Lets hope all goes well at the annual meeting and good luck to all. There will be some bad news but most likely this stock has already overshot on the downside of fair value.