The value of Herborium Group, Inc. (PINK:HBRM
, HBRM message board
) multiplied yesterday after China Health Resource, Inc. (CHRI) announced a letter of intent to acquire HBRM.
After the press release, HBRM had an amazing session and closed up 245.45% at $0.0038 with approximately 365.5 million shares changing hands.
CHRI shareholders weren't all that excited by the news, after a quiet session CHRI actually closed down 6.25%.
The press release contained no details on the potential transaction, but that isn't surprising considering it's an announcement of a letter of intent, not an acquisition.
According to the press release, CHRI sees HBRM as a potential acquisition which could help the company get some presence on the US markets.
CHRI's financial reports suggest the company is in a relatively good condition although it was short of cash. With $1.8 million in net income for the quarter ended Sept. 30, CHRI could take the hit from acquiring a losing enterprise with significant working capital deficit.
Still, traders and shareholders should keep in mind that an LOI is very little more than a forward looking statement. Time will tell if CHRI decides to go through with the acquisition and what the details would be.