Blue Star Foods (NASDAQ: BSFC) stock is up 72% this morning. Which is a bit of a surprise to all concerned for there’s nothing that really - objectively that is - suggests that BSFC stock is worth more Monday than it was Friday. Obviously it is - by that 72% of course - but the why is the bit that escapes. For there’s no news other than the announcement of the upcoming AGM and there’s little in that which is value additive. Appoint the directors, the auditors, and then two things about stock issuance: “FOR the approval of the issuance of more than 20% of our issued and outstanding Common Stock pursuant to the terms of the Securities Purchase Agreement (the “May Purchase Agreement”) dated May 30, 2023, by and between the Company and Lind Global Fund II LP, a Delaware limited partnership (the “Investor”), as amended by the First Amendment to Purchase Agreement dated July 27, 2023 (the “Purchase Agreement Amendment” together with the May Purchase Agreement, are herein referred to as the “Purchase Agreement”), so that such issuances are made in accordance with Nasdaq Listing Rule 5635 of the Nasdaq Capital Market (“Proposal One” or “Share Issuance Proposal No. 1”); FOR the approval of the issuance of more than 20% of our issued and outstanding Common Stock pursuant to the terms of the Securities Purchase Agreement (the “ELOC Purchase Agreement”) dated May 16, 2023, by and between the Company and ClearThink Capital Partners, LLC (“ClearThink”), so that such issuances are made in accordance with Nasdaq Listing Rule 5635 of the Nasdaq Capital Market (“Proposal Two” or “Share Issuance Proposal No. 2”);”
Those are both dilutive at the current stock price so why that should increase it we’re really not sure.
Blue Star Foods stock price from Google Finance
We have talked before about Blue Star Foods: “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.””
We simply don’t think it’s an interesting stock. Clearly, we’re wrong, for others apparently do. But we think that what’s happening here is just one of those little speculative flurries in a nanocap. BSFC has a market capitalisation of only $2 million after all - doesn’t take much buying to create a momentum trade. We think this will fade away soon enough. Possibly even by lunchtime in fact.
