A mere LOI followed by a promoter’s mid-day report sent the stock of VHGI Holdings, Inc. (PINK:VHGI) flying last Friday, which led investors to believe that the overall downtrend VHGI stock has been following for the last two years or so might be coming to an end.
Last Friday, VHGI went up a staggering 98.91% closing the session at $0.40 per share. Thus, VHGI not only reached a six-month high, but also its highest market value for the last 3 years. More than 560 thousand shares of common VHGI stock changed hands, marking a significant improvement over the daily average trading volume of approx. 157 thousand.
Needless to say, VHGI’s gigantic surge is due to a mix of two factors: an official press release and a mid-day report. Last Friday, the company announced it had extended until the end of January its LOI to purchase an Indiana-based coal mining company. Although a LOI is by no means equal to a done deal, the finalization of the transaction seems to be only a matter of time considering that VHGI claims to have already spent $4.5 million to build infrastructure. What is more, the company plans to begin full production by the end of January, i.e by the time the transaction becomes a reality.
As a diligent SEC filer, VHGI submitted its third 10-Q report for 2011 on Nov. 14. The document, which covers the three-month period ended Sept. 30, shows:
- cash reserves of approx. $18 thousand;
- negative working capital of $1 million;
- net quarterly loss of $650 thousand.
