But there are optimistic punters - and I'm sure I can count a number of Fin24 readers here - that cannot resist the chance of buying stock at 'cannot go lower' levels. On paper it's so easy to double your money, or achieve that legendary ten-bagger.

There is a reason shares drift to 1c - and it's usually because the market thinks prospects are hopeless. Still some hopeless cases have become hopeful cases.

African Media Entertainment (AME) - with the help of a 100-for-one share consolidation - is one share that recently clambered out of the 1c/2c trading trench with renewed operational energy. Others survivors (and some ?thrivers?) would include Selco (ex Brainware), Onelogix, Kairos and African Dawn Capital (formerly ABC Cash Plus).

But so many - Terexko, Quicko, MMWTech, Noble Minerals, APS Technologies, Sweets from Heaven, Planit, Oxbridge, Bransby, Cycad, Maxtec, IFANet, Hicor, Mouldmed, Elexir and CIH - never really bounced back from those dismal levels.

So why this 'centsitive' preamble? Well, check the vibrant trading volumes in a share called Absolute Holdings, which is bopping along merrily between 1c and 2c.

Trading in the "death channel"

Clearly punters - with I guess a little help from the chatroom tipsters - think Absolute, which comprises a rather curious mix of tile retailing and mining/quarrying, could represent some speculative value at current levels.

I think there's a damn good reason why Absolute is trading in the "death channel". The business - or what masquerades as a business - plainly sucks at this juncture.

Frankly at 1c Absolute - which racked up losses of R1,8m in the year to end June - is more an option on inspired corporate activity rather than a reflection of fundamentals. In fact, relative fundamental value and market price is now a key consideration for the struggling company with proposals to raise much needed fresh capital via a rights issue.

Reasons to avoid

As things stand at Absolute there are a number of reasons that would see me refrain from taking a flutter on the share - even if I could secure a parcel of scrip at 1c.

1) THE DREADED 'B-WORD': The company's balance sheet - to put it politely - is brittle. Current liabilities of R14m loom heavy over current assets of around R6,6m - while the tangibility of the balance sheet is not helped by the fact that the fixed assets comprise goodwill of R6m and mineral rights of R9,5m. Tangible net asset value is reflected as a negative 0,64c/share.

2) UNVIABLE: The business model - currently revolving around tile retailing - is simply not working. Other tile retailers have made merry in recent times, but Absolute's turnover - for three consecutive years - has been snuffed out by operating costs. If a company cannot make money at operating level in boom times then lord knows what it will do in tougher times (which look upon us judging by recent trading results from mainstay JSE-listed building ware companies).

Directors claim cash generated from operations (an outflow of R24 000) is a turnaround from last year (when outflows were R1,2m), which sounds like a desperate attempt to put a positive spin on matters. What is not mentioned is that the full year results show a marked decline from the interim numbers - which showed an operating profit of R297 000 and operational cash flow of R489 000.

3) RUDDERLESS: The company has been sans a skipper for an uncomfortably long time. The MD Andre Janse van Rensburg resigned - sorry 'separated' - from Absolute about a year ago.

With Absolute fumbling along one might have though the board would make haste in appointing a suitable leader. Can they not find a suitable candidate, or does no-one want the hot seat? The company's excuse that it has not appointed a new MD pending the issue of its mining licences seems awfully lame.

4) CH-CH-CH-CHANGES: I also smell a "change of operational emphasis" ? which conveniently coincides with a fund raising exercise.

With the tile retailing operations looking woefully unconvincing it was fortunate that Absolute could offer up a sprig of hope by announcing the issuing of mineral rights for the group's quartzite deposit at Lekkersing in the Northern Cape and its picture stone deposit.

The proposed rights issue has been tagged on this development - which seems unlikely to generate much needed cash flow for Absolute in the short term. It would be far more reassuring if the retailing operations were spinning reassuring cash flows to fund the group's mining ambitions.

With Absolute already having over 700m shares in issue and the shares trading between 1c/2c the details of the quantum and terms of the rights offer (set to be announced in due course) will be awaited with some interest.

5) CORPORATE COURTESY: Absolute shows scant respect for shareholders' rights. With turnover less than R30m - and one effective operating subsidiary - how the hell does it take the company (and its auditors) nearly 15 weeks to produce financial statements? I do note that the group has changed its auditors, so shareholders can perhaps live in hope of timeous publication of financial statements.

Still, the market shows that punters are buying Absolute with vigour. I would love to hear the reasons for their tilting..