Blue Star Foods (NASDAQ: BSFC) stock is up 16% premarket. While a rise in BSFC stock is obviously something to take note of it’s something that simply doesn’t excite us. For we’ve had a look at Blue Star before and we simply don’t think that it’s going to work out well. Sure, that’s opinion and all that but there we are.
Yes, it is true that they’ve been able to raise more capital: “Blue Star Foods (NASDAQ:BSFC) priced its public offering of an aggregate of ~10.74M shares, together with accompanying warrants, at a public offering price of $0.4655 per share. Total gross proceeds are expected to be ~$5M.” They’ve then used about half of that to pay down the most pressing of their convertible notes. They’re now to go on and work on their softshell crab operation in the Carolinas.
OK, so things are looking up, right?
Blue Star Foods stock price from Google Finance
But the thing we’d come back to is that we’ve already had a reverse stock split here and yet it really hasn’t helped all that much at all at Blue Star Foods: “(The) stock should rise 2,000%, or 20 times, at the open today. That it fell 16% yesterday in anticipation of this does not bode well for the reaction. For while this is a necessary technical move by BSCF the end result is not always quite what is hoped. While the aim here is to get the price up the result can be that while the nominal price rises the real one falls.
Blue Star hasn't been doing all that well - to put it mildly - in recent years. They were a crab meat processor and packager which then expanded into aquaculture of salmon. Fair enough, it's just that that hasn't been working all that well. Their latest annual report shows gross revenue of perhaps $13 million and losses of $13 million. Not a set of results that are likely to lead to folk building up that stock and the Q1 results don't make any better reading - worse in fact. The result of these, aha, results, means that the BSFC stock price is down 94% over the past 12 months and it's a pretty much total (well, OK, 98%) loss over 5 years.”
Yes, we’ll agree, things at Blue Star currently look better with the capital raise and loan note payoff. But we still don’t think they look good. This is one of those excitements that we think we’ll sit out.
