Yep, warned newbies yesterday why they should stay away or risk being new bagholders for a borderline fraudulent company nobody can figure out what exactly does it own.
Owned it many years ago, was lucky to sell before the revelations of massive frauds committed by wave of Chinese Reverse Mergers, including SPU, and off the charts fraudulent accounting. Thus, it is insane to believe what this press release says.
P.S. You can find this new entity in their prior filings. Where was it hiding all that time? That is your clue.
Oh well, there will be new bagholders; smart trader got their 5 - 20 percent from the PPS hike. Good for them, but extremely risky for anyone else. Will be back to where it was yesterday in due course.
SPU is one of those reverse merger companies red flagged for allegedly fraudulent accounting. That said, a few buzos are trying to paint the tape by a couple of thousand shares above two. I would not be surprised if it jolts but quickly retreats with whole set of new bag holders.
June 21 2016 AH, news is fishy- one side can get out of the odd agreement; one aggregate number is thrown without anything about the costs, etc.
Too much pain in this stock to make any difference.
Exactly, which numbers- balance sheet, cash flow statement, margins?
Please do feel free to share.
YEP. Lethally corrupt management. They did this deal in order to prolong the gravy train: huge salaries, plush corner offices, big bonuses, generous 'business' expense accounts, and all the rest. It is a great gig, a phenomenal racket. A too bid management at a low quality penny stock micro cap can live the life of an S@P 500 CEO, all at the expense of the shareholders. Thus, the additional infusion of cash buys more of the same, in spite of the horrendous cash burn rate.
Thia stock will breach the 52 weeks low at the first sign of a significant market correction. Thereafter, watch out. I would not be surprised if it goes as far down #$%$ 1.25 before a strong support is established.
$ 1.95 is practically hovering around the 52 week low or 80 percent below year high. The question is, will the 52 week low hold. I am nearly certain that it is a soft support at best. The stock will easily breach it on the very first minor market correction. The question is: where is the bottom, if and when it does breach the 52 week low. Nobody knows. My hunch is that it will go down to at least 1.50. If it is a 10 percent correction, this could go as low as 1.25. In short, watch out below.
Will get worst: Mr. Market's impression now is of either an utterly incompetent, or worst, lethally selfish and corrupt management interested, not in the science, but keep the gravy train going at the expense of shareholders- big salaries, plush offices, huge bonuses, etc.--. They just bought themselves several years of additional on gravy train.
Thankfully, I sold 95 percent of my stake at minor, .25 cents, profit.
Nearly 100 percent sure it will breach 52 week low on the first modest market correction. . Next, watch out. Next technical support can be as low #$%$ 1.25. This management just sold its shareholders to vulture investors. Mr. Market can discount for operational mishaps, but how do you discount the stock for 'low character and selfish management' mishap? Sell, and buy in mid- July at 1.25 - 1.50.
MY experience is that typically vulture investors do the financing at pretty outrageous terms. I would not be surprised if it is units with huge highly dilutive warrants attached, convertible with very short duration and at pretty meager premium so that the intermediate fate of the PPS is sealed. Others invariably flee the stock because there will not be upside potential relative to the risk.
The market will discount this kind of risk as well; unless they announce soon, this stock can easily go significantly sub zero. Because the market hates uncertainty with penny hyper beta stock like this.
Thus, at 52 week low is the safest entry point for initial resistance. If breached, watch out.
Disclosure. I sold my position on the last uptick with small profit; have a very small position left, thus little to no risk.
That same CFO told me that if and when the total MTDC stake is converted, including the 24 million existing share, the total will be close to 32 million.
That is the problem with borderline corrupt penny stock managements: they deliberately make it so hard for the owners of the company to even understand the basic capital structure. They keep issuing these damn 10Q with less than 20 million shares outstanding. Once confronted with the information, first reluctantly admit that it is 24; next reluctantly admit that it could be north of 31 milllion. Now to you, the CFO tells you that MTDC 5 pus million dollars is worth only 3.2 million additional shares, when the stock is selling at .82 cents.
There is a good reason, why Mr. Market does not trust the management. I'll wait for the market sell of and pick it up at .70 - . 72 cents, the price at which it is a safer bit. Meantime, good luck to all.
Low: .70; if in the interim there is market correction 0f 10 percent, it can go down to significant resistance level of ..55 - .60 range.
Upside, if best case scenario materializes, at 3.5 times revenue, is 1.25. To play it conservatively, 9 Million run rate at 2.5 times revenue, and you get . 65 - .70.
In the .30 - .33 area there a moderate technical support. I'd consider entry, but not a hug position, at that area for a 10 - 15 percent bounce. There is a huge overhead supply of 'pain trade' that needs to get unwind above .30 - .32.
However, if the market turns ugly and lack of liquidity in the market become the norm, the PPS can go down to the low .20 cents or even below .20 cents in a hurry.
Horror story trades are the first to get unwind in a market correction.
So be careful you all.
9.5 Million at .45 translates into 21 million plus shares.
Nearly certain that it will fill the .33 - .34 gap, if not today, sometimes early next week. Sell, buy at .24 - .34 range for a mediocre 10 - 15 percent technical bounce.
Reverse split too is coming in good time.
This is 'early trials', let us not jump the gun. Will likely see a bump, but not much more. PPS will open near the pre market level, and fade throughout the day as people take stock of the modest news, plus huge overhead supply from yesterday puts a damper as 'pain trade' unwinds.
Will crush through, first stop is filing the gap at .33 - .34. The market has no choice but to assume the worst: $ 15 - 20 million dollars capital raise or 80 million new shares at .25 - .30 per share. If there is persistent market decline , you are looking at .10 - .15 PPS later this Summer.
The stock bolted from .34 cents on the recent news. Thus, under good scenario it should retest because the hype and pump aside there is no change in fundamentals. With the capital raise, it gets worst.
Unfortunately, you have lost lost 94 percent of your investment. The gigantic dilution ahead plus the monster overhead supply of bagholders means that this will not see $ 1 for years to come. I suggest you sell, go hail marry on shorting SPXL or going long on UVXY.
The news was already in the stock price: revenue estimates already reported were met; 300 K lighter on the quarter number than the estimate. Management hyped the reporting; yet they had already informal guidance to analyst, thus the numbers were expected. Wait for good news on margins. If these are as bad as in Q 3, you should sell; if stable hold; if improving, add to your position. But, for now either sell or hold but do not add.
The book value is 1 dollar per share, including cash, , not four dollars. Here is why: subtract the worthless so-called 'intangible assets' , or 6 million dollars. Next, subtract at least 7 million cash burn through May 30, or second quarter. You get 13 million divided by shares outstanding, it amounts to a buck per share, not four dollars per share. Thus, very expensive, especially considering the ongoing cash burn spigot. That book will dwindle to .50 cents by end of Summer, unless they offer huge secondary at vulture fund price to vulture investors.