China Food Services Corp. (PINK:GDHI) went through a weak trading session yesterday, even though at the opening bell a paid newsletter came to aid the company’s stock. The number of GDHI shares traded for the day was slightly above 4 million and is way lower than the 90-day average.
The promoter who stood behind the Chinese company was New Stock Idea and has already been spotted with a couple of other promotions. The compensation was $10 thousand and typically for New Stock Idea the paying party was not disclosed.[BANNER]
The newsletter, which came at the opening, just spread the already published announcement that GDHI had become the exclusive authorized representative for the Food Club brand in China. After the end of the session, another four promo letters arrived. This time they were presenting GDHI as “the next big China play”.
GDHI is an importer and distributor of domestic and foreign food and beverage brand products in China. According to the published annual financial report, the company doesn’t have a working capital deficit, but it is still generating a negative net income. In fact, as compared with 2009, the net loss for 2010 has risen by $62 thousand.
GDHI stock is currently dangerously heading to the ultimate bottom of the chart. It seems that the company’s failure to improve its financials has discouraged investors. Especially if these investors realize that the gaps in the company’s finances would most likely be filled by additional issuance of GDHI security, which would dilute the positions of current shareholders.
