traded volume jumped over 9 million shares. Yesterday, the heavy trade continued and SAEI added the next 13.45% to its price, while its volume kept rising up.Considering the lack of news about Supatcha over the past ten days, there is only one reasonable explanation on the current up move. On Moday, SAEI announced that its Board of Directors has authorized a share repurchase program of up to $3 million of its outstanding common shares.
Supatcha’s CEO and Director Nikolae Yagodka stated that the program would benefit the shareholders “at a time when we believe our stock is undervalued” and would improve the company’s future earnings.[BANNER]
Along with the stock repurchase announcement, SAEI reported that the technical report for its Barlevskoye and Vynohradiv gold projects were expected to be completed and filed by Dec 05, 2010.
Obviously, investors have been impressed by the positive news and the high trade has begun, though it’s to soon for an uptrend to be registered. As already mentioned on hotstocked.com, about a week ago Supatcha was going down progressively on a tremendous volume and now the stock is flying up again.
SAEI announced that its repurchase program is to be funded with the company’s cash resources, however, its last financial report is not much encouraging. The company has more assets than liabilities, has a debenture loan of $5 million and its stockholders’ deficiency totals over $4.5 million.
The balance sheet of Supatcha shows that the company has no revenues to sustain its operations and no sufficient cash to cover the liabilities, while the losses are expected to continue. In that case, how is the company supposed to fund its stock repurchase plan?
