[[tagnumber 0]]Solazyme, Inc. (NASDAQ:SZYM) opened the market with a huge gap yesterday while the trading volume reached the highest levels for the past two weeks. SZYM is announcing earnings after market close today and the stock could get even more volatile by the end of the week.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]SZYM opened above the 10– and 20–day moving average on Wednesday and volatility was huge as during the session the share price touched the upper Bollinger band. The stock closed then at $3.06 which represents a 15.47% gain from the previous close. Trading exploded as well with over 4.2 million traded shares.[[tagnumber 1]] [[tagnumber 0]]Earlier this week, the company issued a press release that got the attention of traders to increase the hype before the second quarter earnings are announced today. According to the PR, SZYM is starting to commercialize its first surfactant made of renewable micro–algae oil. However, the product will be sold by BASF under the trade name Dehyton AO 45 and it will be produced using SZYM technology.[[tagnumber 1]] [[tagnumber 9]][[tagnumber 10]][[tagnumber 1]] [[tagnumber 0]]The statement does not tell any financial details about the conditions under which the two companies will work together, and what will be the benefits of SZYM from this partnership. Hopefully, there will be more data in the second quarter 10–Q coming out today.[[tagnumber 1]] [[tagnumber 0]]Technically, SZYM could break above the higher Bollinger band as technical indicators give bullish signals for today, yet longer–term the stock is more likely to lose value. The company is still not making any profits and it has $200 million in convertible debt outstanding which is a considerable risk of dilution for shareholders.[[tagnumber 1]] [[tagnumber 9]] [[tagnumber 1]]
Just several days ago, on July 21, the stock of Terra Tech Crop (OTCMKTS:TRTC) hit an almost all-time low of $0.0795. The ticker not only managed to bounce on the very next day but for the past six sessions it hasn’t registered a single one ending in the red. The recovery has been nothing short of impressive and it seems that more and more investors are returning to the stock.
Yesterday TRTC gained another 24.4% and closed at $0.1779. The daily volume surpassed 5.2 million shares, the biggest volume seen by the stock for close to four months. apart from the technical bounce off of the record lows TRTC has also been publishing some encouraging PRs. Before the start of yesterday’s trading the company announced that its subsidiary Edible Garden, which offers hydroponic produce, has expanded its reach to 182 Stop & Shop grocery stores. In addition multiple PRs have detailed the expansion of the IVXX subsidiary – on July 21 4 new retail locations were added, on July 25 another 5 locations were announced while early in the morning today 7 new Los Angeles area based retailers were revealed.
Investors are indeed showing renewed enthusiasm towards the stock but caution should still be used. The latest financial report showed that TRTC is still in an alarming state with:
• $274 thousand cash
• $1.56 million total current assets
• $5.46 million total current liabilities
• $763 thousand total revenues
• $2.1 million net loss
Terra Tech have a working capital deficit of $3.9 million and an accumulated deficit of $38.8 million. So far the company has been funding its operations primarily through the sale of equity with the latest private placement taking place at the start of June. Back then TRTC sold 14,946,119 units priced at $0.1375 for proceeds of a little over $2 million. Each unit consisted of 1 common share and 1 warrant for the purchase of an additional share with an exercise price of $0.20625. A lot of shares were also issued to the directors and officers of the company as bonuses evidenced by the numerous Form 4s filed on July 25.
The next financial report should be submitted by mid-August and it will show if the financial state of the company has improved. It will also reveal the current number of outstanding shares. Investors should also take into account that, if the date doesn’t get pushed back once more, the MediFarm medical cannabis dispensary in Las Vegas should become operational in early-October.
Alpha Natural Resources, Inc. (OTCMKTS:ANRZ) made a spectacular 34.11% recovery yesterday, in spite of the torrent of negativity issued by a popular online stock commenter.
SeekingAlpha author WYCO Researcher had a lot of discouraging things to say about ANRZ, including but not limited to the assertion that the company has “75% chance of bankruptcy and only a 25% chance that the notes will be paid”.
Even though it criticized the market’s negativity, the article itself painted quite the grim picture. So why did the ticker make such a spectacular recovery all of a sudden? Was the picture not accurate?
There are no easy answers to those questions, as ANRZ is not your regular everyday dubious OTC Markets pinksheets penny stock company.
Although it ended up on the pink tier after dropping out of the NYSE, ANRZ is still operating on a scale far surpassing the regular denizens of this exchange. True, up to this point in time, OTC Markets investors haven’t really treated it with more kindness than NYSE investors, but few of the traders that spare it a second’s thought fail to see that it represents an almost unique opportunity for both opportunists and supporters alike. Why?
Even after the company’s staggering jump yesterday, its market cap remains as low as $5.2 million. Just for scale – American Green Inc (OTCMKTS:ERBB), a dubious and now – out-of-favor – penny stock pink sheets company that is now on the wane, because it has given its investors nothing but false promises and disappointments, is currently valued at $11 MILLION.
While at first glance this comparison may seem like comparing apples to oranges, it does a fine job of illustrating just how ridiculously low ANRZ‘s market cap is. Mind you, we’re still talking about a fully functioning entity that makes tens of millions of dollars of profit per quarter.
These facts, combined with the volatility and fickleness of the OTC Markets can make for some very interesting chart movements, as yesterday’s amazing bounce demonstrated.
Needless to say, both long term investors and opportunistic traders ought to be extra careful when dealing with stock as volatile as ANRZ‘s, as the same forces that flung the ticker upwards unpredictably yesterday can tear it down without a moment’s notice at any time.
CGrowth Capital Inc (OTCMKTS:CGRA) issued a press release the other day and said that according to independent third parties, the company’s magnesium dolomite mine is worth around $2.7 billion (that’s “billion” with a “B”). The announcement came out after the closing bell which means that it didn’t really have any effect on Tuesday’s performance. To say that plenty of people were eagerly awaiting the start of yesterday’s session, however, would be an understatement.
Unfortunately, they were all left disappointed. CGRA opened the day with a gap up and during the first few minutes, it tried to move in the right direction. Sadly, it lost steam rather quickly and it tumbled downhill. It eventually stopped at $0.0035 (12% below Tuesday’s value). In light of the news, the performance is absolutely atrocious, and, somewhat understandably, investors are now speculating on the potential reasons for the drop.
Some are saying that the whole thing was caused by an attack from the short sellers. Others reckon that the press release simply wasn’t spread around properly which is why they paid $2 thousand in exchange for a small-scale pump carried out by Small Cap Crowd and its sister newsletters.
Surprisingly or not, the people speculating on yesterday’s slip don’t think that it has anything to do with CGRA‘s pitiful cash reserves at the end of Q1. They don’t reckon that the $1.7 million working capital deficit or the dismal revenues are to blame, either.
They all argue that a company with more than $2.7 billion in assets should be traded at more than a third of a penny, and indeed, if you take the O/S count and do a simple calculation, you’ll see that, in theory, the share price should be much more substantial. Making the right investment decision, however, requires a little bit more than theorizing and using the calculator. It requires research and due diligence and unfortunately, that’s where things start to go wrong for CGRA.
We already mentioned that the figures in the latest financial report aren’t really pushing the ticker in the right direction and neither does the fact that between August 14, 2014 and March 10, 2015, CGRA converted $79,048 worth of debt into 148,045,720 free trading shares of common stock. To put things into perspective, this means that around 40% of the total O/S count and 65% of the float reported at the end of Q1 saw the light of day at an average rate of $0.0005 per share.
In light of this, the price targets of well over $1 that some people are placing on CGRA sound somewhat unrealistic. And they will get downright ridiculous if the rest of the debt gets converted into discounted stock.
[[tagnumber 0]][[tagnumber 1]]Medical Marijuana Inc (OTCMKTS:MJNA) has been sliding down the charts, with little exceptions, for quite some time now. This is not a surprise as we have seen other entities involved in the legal cannabis business suffer the same fate.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]And this is not a surprise, considering the fact that the market cap of [[tagnumber 6]]MJNA[[tagnumber 7]] still hovers around the $90 million mark. Meanwhile, the company has not shown any signs that it deserves such a valuation. Its quarterly report for the first quarter of the year listed the following numbers in its balance sheet.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]cash: $634 thousand[[tagnumber 12]]current assets: $5.26 million[[tagnumber 12]]current liabilities: $3.8 million[[tagnumber 12]]quarterly revenues: $3.56 million[[tagnumber 12]]quarterly net loss: $751 thousand[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]And while those numbers are quite dire the company has another card up its sleeve with which it can boost investor confidence. It is the lawsuit filed against multiple companies that allegedly published false allegations about [[tagnumber 6]]MJNA.[[tagnumber 7]][[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Yesterday the company made a press release in which it informed the general public that the Anti–SLAPP (strategic lawsuit against public participation) motion has been successfully defeated by [[tagnumber 6]]MJNA[[tagnumber 7]] and the lawsuit can continue.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]This led to an impressive 23.81% gain in price during the session and [[tagnumber 6]]MJNA[[tagnumber 7]] finished with a price of $0.052. The total amount of traded shares was three times the 30 day average and the 15 million that switched hands generated $764 thousand in daily dollar volume.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Still, this doesn’t change the fact that [[tagnumber 6]]MJNA[[tagnumber 7]] is still overpriced, so doing your due diligence and weighing out the risks before putting any money on the line is absolutely crucial.[[tagnumber 2]]
[[tagnumber 0]][[tagnumber 1]]The first half of the year was rather uneventful for the stock of Rainbow Coral Corp (OTCMKTS:RBCC). The ticker slowly slid below the $1 per share mark and reached 50 cents by the end of June, while being highly illiquid.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Lately, however, the company has gained quite the attention and has risen to impressive price ranges. It reached a high of $7.65 per share in last Friday’s trading, but slid a bit lower for a close of the week at $6.28. The reason for the climb is the claims that the company has a “flagship” product called Naltrexone that is used for the treatment of alcohol and opioid dependence.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Meanwhile, the true story is that [[tagnumber 10]]RBCC[[tagnumber 11]] had no hand in the development of the drug and has merely expressed intent to distribute it throughout the U.S. and Canada. In reality, [[tagnumber 10]]RBCC[[tagnumber 11]] owns a fish store in Venice, Florida and has some pretty horrifying numbers in its 10–K report for the period ended March 31, 2015.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 17]] [[tagnumber 18]]cash: $5,180[[tagnumber 19]] [[tagnumber 18]]current assets: $7,414[[tagnumber 19]] [[tagnumber 18]]current liabilities: $453,632[[tagnumber 19]] [[tagnumber 18]]yearly revenues: $128,133[[tagnumber 19]] [[tagnumber 18]]yearly net loss: $990,233[[tagnumber 19]] [[tagnumber 28]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Further concern arises when you look at one of the other reasons for which [[tagnumber 10]]RBCC[[tagnumber 11]] was able to climb to such heights. Back in the end of May the company executed a 1 for 100 reverse split which reduced the share count significantly. In the same time, most of the debt of the company could be turned into shares at a fixed price which ranged from $0.007 to $0.04 per share.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]On June 1, when the company was still hovering around the 50 cent per share mark some noteholders received 6,513,355 shares of common stock at a conversion price of $0.02 per share. A quick look at the OTC marketplace of the company reveals that it had a total of 3 shareholders of record as of July 14, 2015.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]This means that a select group of a few people can make massive profits while retail shareholders buy highly overpriced shares of a fish retailer claiming to be a biotech. This would explain the last two disastrous sessions which pushed [[tagnumber 10]]RBCC[[tagnumber 11]] to $2.85 per share after yesterday’s 21.92% drop.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]The profits that can be made by those lucky shareholders are impressively large even at those price levels so we would advise you to do your due diligence and weigh out the risks before putting any money on the line.[[tagnumber 2]]
Tracking the promotion for America Resources Exploration Inc (OTCBB:AREN) hasn’t been easy. Usually, when the third parties try to organize a large-scale pump, they use one of the active newsletters and they sometimes garnish the email alerts with landing pages or paper mailer brochures.
With AREN, however, they decided to use some of the less prominent newsletters like Smart Stock Choices, Stock Tip Magazine, and Best American Stocks. Prominent or not, the pump is working.
It started last week and thanks to a couple of rather impressive green sessions, the stock found itself greeting the weekend at over $0.30 per share. Monday was a bit slow, but yesterday, the ticker really picked up some speed. More than 2.8 million shares changed hands in a matter of six and a half hours and after a 21% jump, AREN closed the day at $0.41. About ten minutes after today’s opening bell, it’s another two cents up which, it must be said, is partly due to a press release which came out after yesterday’s close. It says that the company is going to rework some of their leases which should increase field production.
So, willingly or not, the company is helping, but it must be said that the pumpers are also doing their job well and they seem to be pretty happy about themselves. And they’re not done yet. They’re now saying that this might be your last chance to buy AREN at bargain prices and they’re seriously suggesting that you should do that. But should you really?
The thing is, while there’s no denying their skill when it comes to writing emails with excessive uses of capital letters, the pumpers don’t seem to excel at researching the companies they recommend. They won’t tell you, for example, that at the end of March, AREN had less than $6 thousand in assets. They won’t tell you that the virtual office that AREN use once served as the corporate headquarters of Chimera Energy Corp (OTCMKTS:CHMR) – one of the shadier penny stocks out there.
Last but by no means least, the promoters won’t tell you that less than a year ago, some lucky investors had the chance to get 35.4 million shares (a little less than a third of the total O/S count) for just over $20 thousand. They also won’t tell you that these lucky investors could be eager to offload their discounted stock on the open market.
We, on the other hand, have been talking about this since last week and we’ve been telling you that considering all the risks before putting any money on the line is essential. The warning still stands.
On July 22 That Marketing Solution Inc (OTCMKTS:TSTS) announced that they have received their first international order totaling $68 thousand from a large network marketing company in Asia. The news had an immediate effect on the movement of the company’s stock and since then not a single red session has been registered. Despite the impressive performance investors should be extremely careful when dealing with the ticker.
TSTS is in a dreadful financial state. For the quarter ending May 31 the company reported the following results:
• $3238 cash
• $74,079 total current assets
• $622 thousand total current liabilities
• ZERO revenues
• $386 thousand net loss
It should be obvious that even with this first purchase order the fundamentals of the company simply cannot justify the absolutely unrealistic market cap of more than $70 million. That is right, a company that less than two months ago had a little over $3000 in cash and zero revenues currently commands a market capitalization of $70 million.
Furthermore, since February TSTS has been touted by more than 90 email alerts. The pumpers are still trying to create as much artificial hype as possible and early in the morning today another wave of emails was unleashed. This time the involved newsletters were the affiliates of Damn Good Penny Picks – Penny Stock Newsletters, Prepump Stocks, and Penny Picks, to name a few. For their services they bagged the sum of $15 thousand.
So, who would stand to benefit the most from the incessant pumping? How about the owners of the 26.8 million shares that were sold by TSTS at just $0.001 each? Investors should keep in mind that even more discounted shares could be issued through the conversion of debt – back in March TSTS sold two senior convertible notes in the aggregate amount of $275 thousand.
As we said putting any money in the stock could be extremely risky. TSTS has already begun displaying sings of hesitation closing below its opening price for the past three sessions. Not to mention that the pump emails won’t be able to keep the excitement going for long and another disastrous drop could follow. Back in April TSTS already demonstrated its ability to wipe huge chunks of its value when in in less than three weeks it fell from 55 cents to less than 9.
Totally Hemp Crazy (OTCMKTS:THCZ) lost another 7.71% of its market value yesterday, in spite of publishing yet another optimistic piece of PR just one day before that.
Said press release was boastful as usual, but unlike other times, on this occasion it was very unsuccessful in halting the ticker’s descent. Why?
Maybe investors got tired of hearing the same old unsubstantiated boasts about new and exciting distribution agreements over and over again.
Maybe investors failed to be impressed by THCZ‘s new partner PotNetwork Holdings Inc. (OTCMKTS:POTN), which upon closer examination of its filings, turns out to be yet another unimpressive pinksheets company that is managing to make ends meet so far, but is far from financially stable.
Maybe they are disappointed that yet another press release fails to mention how the company’s fabled record revenues translate into profit or loss.
Or, maybe the announcement just drew too much attention to the company, and more investors than usual decided to check on its filings and found the numbers inside displeasing:
- cash – $95 thousand
- current assets – $1 million
- current liabilities – $1.5 million
- annual revenues – $798 thousand
- annual net loss – $408 thousand
There is no real way to tell with absolute certainty what pushed the ticker this time around, but the result is clear – THCZ is once more on the dime threshold, and if one is to judge by the ticker’s apparent downward momentum, the company’s share prices may well drop below said threshold in today’s session.
[[tagnumber 0]][[tagnumber 1]]Rex Energy Corporation (NASDAQ:REXX) has been suffering a lot on the stock market for quite a while. Closing trade at $2.43 per share yesterday, REXX registered yet another 52–week low and continues to dig deeper. The stock is exactly 85 per cent away from its 52–week high peak hit on Aug. 26, 2014. What is more, the stock has lost a whopping 57 per cent of its value over the last four weeks alone. The situation requires managers‘ attention and the press release that has just been issued might bring the meltdown to a temporary stop.[[tagnumber 2]] [[tagnumber 0]]Roughly two hours before market open, REXX‘s investors caught a brief glimpse of what to expect in terms of production and financial figures for the second 10–Q report of this year. Marking a mild increase in almost every aspect of the company‘s business operations, the news is expected to allow the stock to take a breather on the charts. Will this prove sufficient to buck the negative trend, though?[[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]A quick overview of Rex‘s overall state provides little incentive to guarantee a full–blown recovery at this stage. The independent oil and gas explorer generated $54 million of revenue in Q1 2015, down 34% on an annual basis, which resulted in a net loss of $0.37 per share against earnings of $0.17 per share in Q1 2014. Over the first three months of 2015, Rex Energy‘s cash reserves dwindled by $12.8 million, thus opening a working capital gap of $27 million. And even though the company announced some minor improvements in terms of production and realized prices in Q2, we have yet to see the actual 10–Q to assess what the real effect is.[[tagnumber 2]] [[tagnumber 0]]While analysts forecast a net loss close to $1.00 per share for 2015 and 2016, they recommend the stock as a ‘buy‘ or a ‘hold‘ at least, hinting at a long–term potential for the company‘s business. Insiders also tend to be confident of Rex‘s future chart performance if the net purchases of 1.5 million shares for the last twelve months are anything to go by. However, when exactly (and if) the stock will skyrocket remains to be seen.[[tagnumber 2]] [[tagnumber 0]]Anyway, investors don‘t seem to envisage a price rally in the short term. With more than 22 million shares currently sold short, the vast majority of REXX traders have bet against the stock going up. If a price surge occurred nonetheless, it could take a shorter 5 or 6 days to close out their position, hardly an encouraging time frame.[[tagnumber 2]]