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American International Industries: Arbitration Claim Filed by Former Director for Breach of Contract

I have followed American International Industries (AMIN) for many years and have owned the stock on a few occasions.  The company potentially has one redeeming quality and that is its real estate holdings, however it seems more deals to sell it have fallen through than have actually been consummated.  Let’s just say the track record is not good. 

The stock itself has been in a constant state of decline for several years now which has all be overseen by its chairman, president and CEO, Daniel Dror.  Lucky for him his brother owns a substantial amount of stock making it difficult for investors to hold management accountable for what has been Continue reading →

Puissant Industries is Keeping it all in the Family

There are several reasons to steer clear of many penny stocks trading in the market and Puissant Industries is a case study in control and dilution.  Puissant is a small oil and gas company located in London, Kentucky.  The shares are tightly controlled by the husband and wife team of Mark and Cora Holbrook.  As a couple, both directly and indirectly, Mark and Cora owned 66.87% of the company and their son Marshall owned another 8.89% giving the tightknit family control over 75.76% of the company as of August 18, 2014.

Okay, so with that kind of control they can pretty much do whatever they want, right?  The correct answer is for the most part yes.  There are steps that can be taken by minority shareholders in certain circumstances, but in this case it would be difficult and likely not worth the legal fees given the size of the company. 

When researching penny stocks, there are several warning signs that should at least give an investor reason to pause.  One warning sign is Continue reading →

Shares of STW Resources Soar in the Two Trading Days Prior to Announcing a Big Contract

Even though STW Resources Holding Corp. (OTC Pink: STWS) is not typically the type of stock I buy, I have been watching the stock since early this year.  The company originally drew my interest when it filed all of its 10-Qs for 2013 on the same day in February 2014.  While this is usually not a sign of anything good, I thought it was worth a look.  Upon review, I was intrigued by the fact they actually seemed to have an actual business with revenue.  However, the balance sheet was weak and it did not seem worth the effort to investigate further at the time so I just stuck it in a watch list.

Fast forward to June 20, 2014 when the company filed its 10-K along with a press release that contained an outlook for the remainder of year.  Revenues, while still small, seemed to be Continue reading →

Hancock Fabrics Scraps Reverse Split Thanks to Those Greedy Investors

After the market closed yesterday, Hancock Fabrics, Inc. (OTCQB: HKFI) announced it would pull the plug on its reverse split and not seek the approval of shareholders at the upcoming annual meeting.  The plan proposed a 1-for-1000 reverse split with fractional shares being acquired for $1.20 per share.  As expected, the stock took a major hit today as those investors expecting to cash out their 999 shares at $1.20 per share began unwinding positions.

The plan was originally unveiled in an earnings release on April 25, 2014.  On May 9, 2014, the company filed a Schedule 13E-3 and its Preliminary Schedule 14A making its intentions of a going private transaction official.  Investors saw opportunity and immediately started stuffing as many accounts as possible with 999 shares.  This is a very common technique used by many to receive what is normally a low risk and nearly guaranteed return.  That is unless the company Continue reading →

Design Within Reach Shares Skyrocket Nearly 577% on Buyout Offer by Herman Miller

The shares of Design Within Reach, Inc. (OTCPink: DWRI) were up sharply in early trading this morning on news that Herman Miller would acquire an ownership interest of 84% for approximately $154 million in cash.  According to the press release, Herman Miller CFO Greg Bylsma stated,  “Each of DWR’s shareholders will be entitled to receive approximately $23per share on a fully-diluted basis as a result of the acquisition.  Furthermore, an escrow account (borne solely by the largest DWR shareholders), will be established to satisfy any post-closing obligations resulting from the transaction. Shareholders will receive further information from the Company regarding the acquisition shortly after closing.”   

The current CEO of Design Within Reach, John Edelman, and its current president, John McPhee, will continue to manage the operations of the unit within Herman Miller and will convert their remaining ownership in Design Within Reach for a 8.5% ownership stake in the newly formed consumer business unit under the Herman Miller umbrella. Design Within Reach expects to benefit through a larger presence within the higher margin consumer market and Herman Miller will gain access to an exclusive product portfolio further establishing the company as a premier lifestyle brand.  

It sounds like a match made in Heaven, but who cares unless you own or intend to buy shares of Herman Miller.  The real question is can more money be squeezed out of the deal by investors?  The answer is… Continue reading →