New contracts, pointing in the direction of eventual increase in the revenues, yet a price decrease after announcing it – this is what happened with China Modern Agricultural Information Inc. (OTC:CMCI) stock last week. This is the general picture. Details matter, nevertheless. 
This is last week in terms of news:
- Monday,June,27th – China Modern Agricultural Information Becomes Official Supplier of SuihuaDongxing Dairy Products Worth an Estimated USD$1.65MM in Gross Revenues;
- Wednesday,June,29th – China Modern Agricultural Information Signs Fresh Milk Supply Agreement With Anda City LongXing Dairy Co., Ltd. Worth an Estimated $1.5MM in Gross Revenues;
This is last week in terms of stock performance:
- Monday, June 27th – the session opens at $1.46 per share;
- Friday, July 1st – the session closes at $0.90 per share;
So, what could be the cause for this free fall? Buy on rumors, sell on news? It is possible, but there is one more aspect to consider – short selling. Shorters had a busy last week, as their activity would amount to half the total trading volume on some session. There is also another peculiar aspect – the financial statements of the company. Here is what the last 10-Q covering the first 3 months of 2011 includes: [BANNER]
- $3.9 million in cash;
- $7.1 million in total current assets;
- $301k in total current liabilities;
- $6.8 million in revenues;
- $5.7 million in net income before non controlling interests;
All in all, not a pessimistic data to look at. Yet, a steady decline in the stock price. For one reason or another, all this brings a level of uncertainty regarding the near future of the company and the stock performance. Whether the free fall would continue, or a reverse in the trend would form, is a question yet to find its answer.
