RE: part one of detaxnow''''s prophecyWe have broken the $1.00 range, as I predicted. Any small shareholder reading this post, I urge you to sell and invest your money elsewhere, before you lose it all!
The $1 share value is a critical number:
- Mutual funds will dump shares, many can't hold "penny stocks" and they all act with a herd mentality. Any strength in HYG will just be an exit opportunity for the mutual funds, thus keeping the company below $1.
- Financing will be more difficult. Who wants to finance a penny stock?
- Margin buyers have to put up more money to buy this stock, so they will avoid it.
- They will likely breach their TSX listing requirements this year. TSX venture bound!
- Expected costs of bankruptcy? This is the most important point in this list! For example, if a third party needs to buy a test station or electrolyser will they really want to give Hydrogenics 40% up front if they will be bankrupt before you get delivery. They will have to do more vendor financing, thus hurting their bottom line even more. Customers will likely go elsewhere to buy fuel cell equipment.
- Employee bleed. The smart ones, the hard workers will jump ship. The only ones that stay are the overpaid management and the slackers.
- I predict more cooking of the books. ie financial statement shenanigans such as the big bath they just took. nobody will be able to trust the filings soon.
- Fuel cell makers will not benefit from any greenhouse gas emission cuts, the investment capital is going elsewhere such as hybrids and ethanol.
- Their market capitlazation is still a baffling $90,000,000 Canadian dollars! This company is not worth this amount! I think a more reasonable number is about $25,000,000 for the assets and patents, which is about 25 cents a share. We will see that value this year.
- They are not even updating their website! There are photos of management team members that left months ago still on it!
- I predict a closure of the Burnaby test station manufacturing facility this year, it bleeds red ink. They will consolidate in Toronto to save money, thus removing themselves from the one fuel cell tech cluster that matters.
- The ultimate value of this company will be determined when a bankruptcy trustee gets to auction off the parts of Hydrogenics in 2008.