Unfortunately, I am all too familiar with Gary Evans and his preferred named, Hunter Resources, enterprises. Now comes Energy Hunter Resources, of which I am about to warn you. Caution, if Mr. Evans runs this latest iteration in a similar fashion to his, now defunct, Magnum Hunter Resources (OTCPK:MHRCQ) and Green Hunter Resources (NYSEMKT:GRH), be prepared to lose your entire investment and suffer through dreidel* spun years of conference calls assuring you that EHR (its probable future call symbol) is doing great.
* A dreidel is a four-sided spinning top, played with during the Jewish holiday of Hanukkah. The dreidelis a Jewish variant on the teetotum, a gambling toy found ...
I have provided this link to his latest venture and its Proposed Initial Public Offering.
And while he builds his company with your equity capital and rapidly increasing debt, he'll weave a tale of a bright and lucrative company future. And it might appear that way for a while until the mountain of debt begins to weigh the company down and ultimately doom it if and when the winds of fortune take a turn for the worst. When that happens, the genius of Gary Evans will surface in the guise of P. T. Barnum. Will he outright lie? Not necessarily. Gary is a smooth operator who, I believe, began his career in the financial sector, the breeding ground for such smooth operators, who knows that outright lies can get him in trouble and possibly lead to years of jail time. No, Mr. Evans will hint about potential sales to a bevy of willing buyers for whatever property or future pipeline he plans to sell. He will throw out inflated numbers, which are more aspirational and inspirational rather those born of reality. He might, in fact, ask for seven hundred million dollars, and suggest that he is negotiating with several buyers, however, what he won't want you to know is that these buyers, most probably, have bid no more than two or three hundred million for those particular properties.
Yet with spin like this Mr. Evans will draw in more investors and keep others from abandoning this sinking ship before it eventually sinks into a sea of red and all your money along with it, thereby magnifying your losses beyond where they might have been had Mr. Evans stated his case with a bit more honesty.
Which brings me to Gary Evans, CEO of Magnum Hunter Resources (MHRCQ) and GreenHunter Resources (GRH). Unlike Mr. Porter, Mr. Evans played loose with the truth on several occasions during his company conference calls. Sad to say both Magnum Hunter and GRH are now in bankruptcy; although, in all honesty, the momentous fall of oil, NGLs, and gas prices were primarily the cause and in no way can or should be laid at the feet of Mr. Evans.
However, my complaint stems from the way Mr. Evans led his investors to believe falsehoods and promises, which held us spellbound. He wove a tale of the seven suitors champing at the bit for an opportunity to purchase his Eureka Hunter pipeline subsidiary, suggesting a price of about $600-$700 million. When asked who, he refused to disclose their names because of the sensitivity of the negotiations, which we had no option but to accept. Although I can't really claim there were not seven suitors bidding for Eureka Hunter, in retrospect, one can safely assume that the best price any of them offered, if they made an offer at all, was far below the figures he proposed. Had they been even close, he, as a prudent businessman, would have accepted their offer and possibly saved his company.
Promising the same during GRH conference calls, Mr. Evans wove a wonderful story about the wonders of water treatment and the company infrastructure, trucking, pipeline, barging, etc., he had built. Actually, it was, and probably still is quite impressive. However, he continually promised GRH would be barging waste-water down the river, and that Coast Guard approval was just around the corner, which it never was, ultimately costing investors additional losses.
In conclusion fellow investors, all that glitters is not necessarily gold and there's a sucker born every day; it is my hope that you don't become part of just another sad story.
Disclosure: I am/we are long GST-A.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.