Q: I have held shares in Fortune Minerals since 2012. It has been a dud and it is worth almost nothing now. Last year, the Canadian Federal Government said they were offering money to accelerate the production of critical minerals like cobalt, which Fortune Minerals will produce if they ever get their project underway. In May, Fortune Minerals said it is working with Rio Tinto to develop technology to expand production of cobalt and bismuth. Maybe a good sign, but the whole project is moving so slow! And they need cash! At this point, would you take the tax loss or continue to hold? Also, if you had to pick either Fortune Minerals or Upstart for tax loss selling, which would you choose? Thanks.
5i Research Answer:
FT has $9M in debt and other obligations, and the cost of developing its projects does not change with the stock price. Thus, a 3-cent stock means a LOT of dilution to shareholders just to raise a fixed amount of capital. It is extremely hard for a $16M market cap company, down 56% in a year, to attract new investor interest. We would sell. UPST is very far from perfect, but we think at least has more upside potential if things work out for the company.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in UPST.