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Why AgFeed Industries Inc. (FEED) Is One Of the Worst Companies Around & How I Knew

Posted by Timothy Sykes on Sat 4th of Oct, 2008 09:46:05 AM
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You might remember over the past 7 months, I’ve written some pretty negative articles about FEED, “Those Hypesters Are At It Again“, “Pirates Pretending To Be Pig Farmers” and “The SmallCap Pump & Dump Capital Raising Game“.

Well, judging from the chart below, it looks like there’s a bit of justice in the world:

big chart Why AgFeed Industries Inc. (FEED) Is One Of the Worst Companies Around & How I Knew

Yes, their lies have caught up with them, even as they continually “raise earnings estimates”.

See their top holders, most of whom who did their investing in the high teens, and laugh in their naive faces:

DEUTSCHE BANK AKTIENGESELLSCHAFT 1,402,767 4.21 $20,999,421

INSIGHT CAPITAL RESEARCH & MANAGEMENT INC. 1,201,472 3.61 $17,986,035

Tiger Global Management, LLC 810,000 2.43 $12,125,700

Barclays Global Investors UK Holdings Ltd 461,818 1.39 $6,913,415

Anybody who’s dumb enough to invest big money in a pump and dump scheme hasn’t read my book An American Hedge Fund or watched my PennyStocking DVDs.

This isn’t complicated–these companies uniformly suck. You are a total idiot if you believe anything say. And i’m an idiot for not staying short longer…

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  • Adriel
    For some reason the pic isnt loading for me, but it may be just me.
  • Reaper
    the chart doesn't load for me either.
  • formersissyvalueinvestor
    Tim, there are at least 25 more china R/M scams out there just as bogus as FEED, if not moreso. All with the same underwriting line-ups of (now) Institutional-BAGholders.
  • formersissyvalueinvestor
    follow up:

    I meant to say 25 or more "uplisted" china R/M scams in addition to your fav FEEDstock.

    In the OTCBB and PINKSHEET markets there are hundreds more china reverse/merge pure scams.
  • yes, but its not impressive to call a fraud on OCTBB/pinks, it is impressive to find one on the nasdaq
  • formersissyvalueinvestor
    The china (saturation) list in the link below hasn't been updated since July. I could add about 40 more today and no telling how many more I have missed. Scroll to the bottom for the "UPLISTED" and "UPLISTED W/OPTION TRADING" lists. I've been buying puts in this Fortune Cooked chinese (underwritten by Institutional-BAGholders) garbage for months now. Great site here, Tim...keep the TRUTH coming? Thanks.

    http://investorshub.advfn.com/boards/read_msg.a...
  • marmaladeskies
    nice call on FEED's drop, but why is it one of the worst companies around, and how did you know?
  • Alex
    Tim, if FEED is so blatantly worthless, how is it that Barclays and these others would be invested (surely they would get word of them being a fraud)? Or maybe they really are just blindly throwing funds at these hot momo stocks and sometimes not doing prudent DD? Wierd. Even though it was poor, they could've done worse (financials sucked worse than FEED)
  • formersissyvalueinvestor
    From FEED's Sec-Files:

    """Filing Date: 3/13/2008 Form Type: S-3

    Recent Transactions and Events

    On February 29, 2008, we completed a private placement of senior convertible notes in the aggregate principal amount of $19,000,000 and warrants to purchase up to an aggregate of 380,000 shares of our common stock at an initial exercise price of $10.00 a shares pursuant to a Securities Purchase Agreement, dated as of February 25, 2008, by and among the Company and four accredited investors who participated in the offering. This transaction was facilitated by Deutsche Bank Securities Inc., which received an eight and six tenths percent (8.6%) financial advisory fee in the amount of $1,634,000. See “Selling Stockholders.” Under the terms of a registration rights agreement entered into with the purchasers in this private placement, we agreed to register the resale of 130% of the number of shares of common stock initially issuable upon conversion of the senior convertible notes and exercise of the common stock purchase warrants.

    On February 22, 2008, we completed a registered direct offering under our registration statement on Form S-3 (Registration No. 333-148386) of our common stock pursuant to which we sold an aggregate of 2,444,448 shares at an offering price of $9.00 per share for aggregate gross proceeds of $22,000,000 to three accredited investors who participated in the offering . We compensated Median Asset Investments Limited a finder’s fee of 8.6%, representing a total finder’s fee of $1,892,002, for that offering."""

    These Institutional-BAGholders taking all these outrageous underwriting fees had nary a care if any of these china reverse/merges were scams. "...financial advisory fee in the amount of $1,634,000..." - "...total finder’s fee of $1,892,002...". ROFL, that in itself shows how ignorant and/or deceitful management of these scams are! Borrowing $22M at a cost of $1.9M off the top in finder's fee? Don Corleone would be embarassed.

    All these Insitutional-BAGholders are holding much more toxic-paper in the form of scam-company-stock, as yet to be discussed by the media pundits.
  • Cletus
    Alex not that it matters at all for trading (especially with penny stocks) but the main driver of price appreciation in stocks over the long term is earnings growth. The thing is earnings growth only works up to a certain point and then when stocks start getting P/E's of 35x+ it just becomes a pure momentum play and eventually ends up as a game of muscial chairs, with the stocks crashing the back to reality. This is what happen with hyped up fertilizer companies like POT and the Solar Stocks like STP and LDK etc. The only difference is these companies actually had earnings growth. With FEED the stock came from penny land and although it has earnings it could never compare to these other real companies. More or less all of these hyped up plays regardless if they $1 stocks or $100 stocks that came from $1 are all a version of Tim's supernova pattern its just that as the stocks move up higher and higher they no longer make 50% upside intraday moves and the pattern moves from a intraday chart to a weekly or monthly. Analyst and the IB's like to get in on the hype when these stocks get to a price where the real banks are able to pitch it to there clients. Also FEED paid this ridiculous fee to Barclays because they were printing shares all the way up and they wanted to keep the game of musical chairs going for as long as possible. I know this is getting into fundamentals a bit more but this is the way real stocks work in the longer term as opposed to penny stocks that move off of the charts, news, hype, or pure and simple fraud.
  • get a fucking clue you lucky bitch, check the MOS and POT fall on thu. and you could see why a fuckin' agri co would tank on friday
    fuck off and die little piece of shit
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Date Stock Buy Sell Net
Nov 6 QXM $4.31 $4.80 $1936
Nov 4 COT $8.66 $8.88 $642
Nov 4 QXM $4.61 $4.89 $822
Oct 30 DDRX $25.70 $26.53 $812
Oct 29 CTDC $4.00 $4.42 $781
Oct 26 AWSL $3.24 $4.10 $2516
Oct 23 RODM $5.27 $5.23 $301
Oct 22 AMLM $2.69 $2.97 $820
Oct 22 USEG $6.12 $6.09 $85
Oct 20 CBOU $8.93 $9.06 $243
Oct 16 VRMLQ $16.79 $18.65 $2773
Oct 13 YONG $11.05 $11.66 $1202
Oct 13 NPHC $0.59 $0.71 $583
Oct 12 IMGG $0.60 $0.70 $682
Oct 9 ZAGG $5.50 $6.10 $2380
Oct 7 GVBP $0.03 $0.27 $702
Oct 1 NPHC $0.70 $0.85 $1482

Total: $92,304 (644%)