ChinaTechWatch has a great column today, about a Chinese mining company Admax resources, that just changed its name to China YouTV (CYTV.OB). The firm is currently involved in mining, but wants to expand into online video, a completely unrelated line of business.
This is so typical of Chinese companies, if one thing does not work they just try someting completely different. They probably heard that YouTube is a big success in the US. Well, they likely reasoned, then we should do that here too of course. Not hindered by any knowledge about internet, video or the competition they start pooring money into a venture that will surely fail. It’s a pity for their investors, and it explains why I only invest in Chinese companies where I know the management personally.
An interesting passage from the press release explaining their strategy:
If the Company needs additional cash and can’t raise it, it will either have to suspend activities until it is able to raise the cash, or cease activities entirely.
If the Company can’t find any mineralized material or it is not economically feasible to remove the mineralized material, it will have to cease activities and focus on the new market: the video sharing industry in China.”
This is not a joke, but a serious press release…
In case you are an investor in this mining/video company sell your shares, or otherwise make sure the CEO will be fired on the spot. And I hope potential investors will Google this company and find this blog post. Investor beware!