Icon Media Holdings, Inc. (OTCMKTS:ICNM) Shoots Up on Tier Change

8ICNM_chart.pngAfter a large number of zero-volume sessions over the last few months, yesterday Icon Media Holdings, Inc. (OTCMKTS:ICNM) was suddenly jump-started into action. A total of 19.4 million ICNM shares changed hands and the price stopped 150% up by the closing bell.

If traders shift more shares over a single session that they did since the start of 2014, something must be up with the company, right? Well, in a way this is true for ICNM. Even though the company didn’t bother to publish a press release through some of the popular services, if you look hard you will find that yesterday ICNM announced it was reclassified up into the Pink Current Info tier of the OTC.

This is the second step in improving the company’s formal standing, after ICNM was moved from Pink No Info up to Pink Limited back in mid-April 2014. With ICNM‘s Q1 report due any time now, traders can have a look at ICNM‘s last available filing – an annual for 2013, containing the following:

  • $6 thousand in cash
  • $1.2 million in current liabilities
  • $1.2 million in 2013 annual revenues
  • $89 thousand in 2013 annual net loss

The revenue figure is fairly decent, especially for a pink sheet whose business is ‘wall décor’ and net loss has been significantly reined in, compared to $750 thousand for 2012. However, the share structure and ownership percentages reported in the filing seem rather confusing.

5ICNM_logo.jpgThe annual states that there were 501 million common shares issued and outstanding as of late April 2014. Over 2014 there were also 250 million shares issued as ‘deferred salary’, another 80 million for the settlement of debt and an extra 6 million for services. When listing beneficial ownership, the report states that the 45 million shares CEO Bob Deakin owns amount to 27%. This would only add up if counted as a percentage of ICNM‘s lower number of shares before the 2014 issuance of a massive 336 million. Why ICNM chose to report the percentage of its share count prior to 2014, given the report was published in April, is not too clear.

This in turn means that if there were 336 million shares issued in 2014 and the outstanding count was 501 million in late April, the company diluted its common stock by 300% in just the first four months of the new year.

Traders should keep in mind that chasing stocks up the charts is never a wise thing, especially when sub-pennies burst out of nowhere and steal the spotlight. Such runs are not unlikely to retrace and caution is advisable.

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