Inuvo (INUV) A Pedestrian Internet Company Fighting To Become Profitable
OK, Inuvo (INUV) is failing- let's get that. Only sharp expense cuts saved 4th Quarter '13 from disaster, resulting in a miss of (.01) vs. consensus (only one analyst) of .02.
But give Inuvo credit for its drastic cutting.
Company is carrying $121M in losses
Company is re-tooling
Inuvo needs immediate money, thus the shelf registration filed Tuesday increasing the A/S a whopping 74%.
Reportedly, company has history of slow use of registrations- good but still alarming in size.
Yesterday, an embarrassing INUV piece on Seeking Alpha by well followed writer Sujan Lahiri ("insiders bought heavily at current levels"- they were stock option grants- a portion of which were immediately sold by all seven officers and directors) prompted volume of 13 X's 90 DAV yesterday, yet PPS dropped 3.15% to .86. You can bet the company was dumping beaucoup shares into the rise, courtesy of the pump piece, fraught with distortions and breathless presumptions ("Inuvo is an obvious takeover target") .
INUV's chart is broken- 50 MA under the 200 and 20 under the 50. 1st support is .78 (closed Wednesday at .86).
Traders want to play this month's 36% drop (.82 at writing) but dilution will kill any increase in the share price, as happened yesterday, unless the company employs considerable restraint in exercising the increased A/S. But Inuvo is in imminent danger- it has to get its cash position up to $6M pronto to be in listing compliance . That means it will be dropping shares into the O/S for the time being.
Inuvo's share price is down for good reason- declining revenues, changing model and no profits in a pedestrian field of internet ad placement. There are no foreseeable catalysts.
Internet stocks are currently the worst performing sector in the market so don't expect much from this stock in transition for now.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.