A few issues with MUS:
1. It keeps stringing on investors, by comparing it against GEM. Anybody who follows MUS is well aware how GEM has performed, and continuing to declare that they will follow GEM with the hope of replicating its success is nonsense.
2. Inventory is growing - When will this inventory be converted into $$$? Latest announcement said exactly that, they are strapped for cash and want to quickly commence cash-flow. Any company's lifeblood is cash-flow, this is what the senior management & board should have focused on. Especially when they already had production happening. It is concerned and does not want to compete against competitors, hence it will sell rough stones (worried about increased supply to reduce price in commodity??) If that is the case, what is the price on these rough stones and who is buying them?
3. Special stones - MUS had in-depth discussions with industry buyers, and has decided to follow GEM's strategy (again advertising your competitor and what they did, to assure they are on track) and for now suspend the sale. So, they will sell plan to "auction" this at a later date anticipating a bidding war and getting a higher price. So in other words, you're telling buyers, that we will wait and think that it is a better idea to wait because buyers will pay a higher price - but meanwhile, we will sell rough stones because will generate cashflow (meaning we are really strapped for cash and need to do something about it).
4. CJ advises that Mustang recently completed a comprehensive market study showed that selling its rubies through an auction/tender .... is the most effective ....
As a company, do you not perform such a study "BEFORE" you go into production? It is not very hard to study the most effective way at selling your products - you simply look at the market for proven models!
A person who manages the company has to build credibility. Building credibility requires integrity, meaning - you do what you say you're going to do.
So far, there has been a lot of sales pitches - trying to sell ice to eskimos, raising equity and burning shareholder's long hard savings.
As a disclosure, I previously did invest in MUS, but because the SP rose from $0.02 to $0.11 in 1 month, a hefty 550% - something cannot be right!
Biggest problem with this type of company - it fleeces all sorts of peoples' savings and they are left stranded.
People will look at the chart, draw a line and look at the 20/01/2017 and may think - this has to be a great support and surely it can't drop any lower. I myself wanted to go and buy in at 4.9 & 5 for a trade, bought thought it's too risky. Not worth a few pips, for a bigger drop.
My opinion, yes... it will probably bounce, only to suck people in and drop further. Because sellers are looking for buyers.
This company can continue to compare its progress against GEM as much as it likes, until "Appendix 4C" is showing qoq growth - good luck!!!
DYOR
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