Good Evening,
A few weeks ago STHC management decided to go for the gusto and now the revenue bars keep stepping up on a weekly basis.
I’ll lay out the “before” and “after” pictures down below, but right here I want youto focus on what the shift from 1M to 25M does to a chart:
That’s what exponential growth looks like! How can any red-blooded trader resist the chance to play a trend like that?
STHC used to be a relatively humble residential property play. They bought houses in Indiana, fixed them up, sold them off at a higher price.
Then management realized that all that real estate that they bought for a song could secure a big credit line that they in turn could hand out.
Suddenly STHC could play with the big boys and be the investment banker to local start-ups. They’re doing that now. (Read more)
One of those start-ups, Nate’s Homemade, was apparently irresistible because STHC wanted to be more than just the banker.
So they kicked in to buy a new production line. They decided to build a new factory as a place for Nate’s to pour its waffle mix into spray cans.
Each step in the dance earned STHC a bigger piece of the action. And as their stake in Nate’s success climbs, the share price has gone berserk.
Back on February 11, STHC thought their canning equipment could spin up maybe 1M a year in free cash and the PPS hopped up to a mighty 0.02.
Last Friday the prize pool reached 25M and STHC soared to 0.045. I don’t know how 25x the revenue adds up to “only” a double, but OK.
Did I mention that STHC management is so confident in this new direction that they’rebuying back up to 150 million shares? (Read more)
I guess they figured that those shares were still a big bargain at 0.03-0.04, but whatever happens, that buyback should make things interesting.
Cutting the STHC float in half doubles the per-share impact of every buck they book in revenue.
And of course outside traders are going to see their chances to collect a significant STHC stake shrink a lot.
Dwindling supply of shares . . . dramatically higher revenue flowing in . . . this is the kind of situation that can heat up to critical mass very fast.
Look at that chart again. Yeah, STHC has come an awfully long way in the last few weeks and months. Long-time shareholders should be cheering.
But we’re still trading below 0.04. Does that look closer to an ultimate ceiling or aground floor to you? We’ll find out tomorrow!
Sincerely,
Papa Roach
