This isn't a value trap since there isn't any value. It is a concept stock. Some people who believe in bitcoin or blockchain future buy BTCS but fail to look at their financials and their actual business.
The company never meets their expectations but the last quarter appeared to be the start of a turnaround. After the last report I went from doubting the company to looking to buy some shares but I will wait for an even lower price or the price trend to reverse.
I keep wondering why the price is dropping after the last earnings report showed improvement. Maybe it is worrying that they won't meet their new loan covenants.
Few assets and many liabilities tells me that 1 cent is a high price. It might not be over if all debt holders accept shares but the last loans gave those debt holders rights to the assets so they might want the assets instead of shares. If shares are taken the company will still probably struggle to continue operating and the dilution will be so great that current shares will have little value. Anybody with many shares should give a lot of thought to taking 1 cent.
Before buying I would like to see some selling volume to find out if there is significant buying support in the $.60s.
After looking at how much of their negative book value is from derivative liabilities instead of debt, I believe that debt to shares conversion won't create as many shares as I had previously thought. Maybe it wouldn't take hundreds of current shares to be worth a penny.
Looks like their plan is to try and convert debt to equity. With the company having such a high negative book value, debt holders wouldn't get much in bankruptcy so maybe debt holders will take stock in place of almost nothing from bk. If converting debt to shares happens the dilution will be so huge that it probably would take hundreds of current shares to be worth a penny but that would be more than zero from bk.
Most of their shares came when their company Bitcoin Shop was bought out by Touchit Tech. I don't have any idea how much they invested to start Bitcoin Shop but many times since then Charles Allen has stated that his family money was some of the funding of BTCS. As far as hedging with puts, I doubt if puts would be available on such a small and risky company. My guess is that the principle owners have experienced significant losses from their company.
Many investments don't work out. I imagine the principle owners and managers have lost a lot more than you. This was not a scam but a company that made some poor financial decisions. The principle owners had opportunities to make millions by selling when the shares were at 10-30 cents but stayed committed to their company. It is sad that they and others like yourself have lost money on this company but surely you understand that there is risk in investing in businesses.
No shame in trying to salvage something for current shareholders. It might not be much but otherwise debt holders end up with all of their assets.
I think you are correct. Not much buying interest. Anybody wanting to sell has to take a lower price. Their last earnings report changed me from negative to positive but I see no reason to buy until the down trend ends.
Surprised they aren't doing a reverse split so that the share counts and share price would look better. I once owned some shares in a company that diluted to 9 billion shares and then did a 20,000 to 1 reverse split. The company never went bk but my initial thousands of shares became worth less than the selling commission.
Even though the dilution will come at much lower prices it is good news. If they can change most of their debt into shares they might survive. Since there is little for debt holders to get they might be willing to take equity inside of forcing a bankruptcy.
The price is dropping because selling is going on and nobody is willing to pay much for a company that has $600,000 in assets and $ 5,400,000 in liabilities. Debts are coming due this year and their last loans just tied up their few assets. Since they have few assets and their mining revenue isn't much I would not call them a big mining operation.
I don't think amount of shares will end up mattering. They owe more than the company is worth and their last loan tied up their assets. Not sure that other debt holders will end up with nothing but I sure don't see enough assets for shareholders to get anything.
10Q filed 5/16/16 for period ending 3/31/16 total value of assets $571,757. What is your source?