Just Like Walmart

Just like Walmart, some of these junior miners want to do the roll back too. Problem is it is not always great for those who have already been a consumer of the company stock. I am not sure what to think about companies that start the old rolling back of 1:5 or 1:10 share basis. You have a 2 cent stock that ends up being a 10 cent stock but the treasury is still empty and the stocks starts to drift down anyhow. Back down to 2 cents or maybe even less. I don't really know why some companies do this. One of the reasons is that if you have a higher stock price it can be a bit easier to get financing. A lot of funds or money managers don't like dealing with companies that a quadzillion shares outstanding with a price of 1 cent. Having said this though I have rarely seen a rolled back stock ever get to a point where you were back in the money. I can't think of any but I do know of lots that just ended up in the same situation as they were before the rollback.

What really bothers me is there is a cost to all this. A lot of companies roll back the stock and do a name change. This all requires a lot of legal work along with stock exchange filings etc. and that all costs money. Money that could be used on a project, a JV or something more tangible. If nothing can be found as tangible, how about maybe just sit on what cash you have for a while and seek opportunities. I personally get upset because I have been involved as a share holder in various rollbacks and have yet to come out in the green and I could never figure out the name change. For me it's like management thinks that a new name will present new opportunities or new stock holders. Maybe it worked well years ago but in todays enviroment with the internet that NEW name is still painted with the old brush in my opinion. Anyone who does any kind of DD on management can soon figure that out.

So which companies are rolling back? Well this past week Decade Resources DEC did a 1:5 rollback. Foundation Resources FDN got an OK for a 1:10 rollback along with a name change to Birch Hill Gold Corp. effective Oct. 28 2013. I am sure that there are many more in the pipeline here and I will start posting them and letting you the readers know.

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GAdams