Yesterday the stock of IDGlobal Corp. (OTCMKTS:IDGC) once again found itself among the top traded pennystocks. The company was able to capture the attention of the market resulting in the record number of 665 million traded shares. The buying pressure boosted the stock to an impressive 80% gain and a close at $0.0009. IDGC has been fluctuating within the triple-zero price ranges for nearly a year now and we will see if this time it will be able to leave it behind.
The unprecedented level of activity around the stock was caused by the latest PR statement which was issued yesterday. In it the company announced that they have obtained the exclusive licensing and distribution rights for a whole line of products from the company Corr Brands, Inc.The fact that this new line is going to feature cannabbis and hemp products certainly played its role in luring investors in.
Although yesterday IDGC
showed such a positive performance it is important to keep in mind that at these extremely cheap price ranges stocks can fall equally as fast. And there is no shortage of red flags around the company that could deter it from reaching higher valuations.
Let’s start with their financial results. According to the latest quarterly report at the end of March IDGC
- $20 thousand cash
- $286 thousand total current assets
- $4,3 million total current liabilities
- ZERO revenues
- $476 thousand total operating expenses
As you can see IDGC
has not been able to generate even a dime in revenues and yesterday’s PR didn’t mention any launch dates for the new products. At the same time in order to finance their operations the company has issued millions of cheap shares resulting in a massive rate of dilution.
At the end of 2013 the outstanding shares of the company were 965 million. Three months later that number had reached 1.4 billion while two months after that it was sitting at 1.8 billion. In other words in just 5 months IDGC
has doubled the amount of its outstanding shares. All of those freshly issued shares came into existence through debt conversion and were priced at just $0.0001.
is rising on nothing more than speculations. The company has limited operations and the crushing dilution is more than likely going to continue. Any investment in them should be preceded by thorough research and careful planning in order to avoid
any unnecessary losses.
Yesterday the stock of In Ovation Hldgs In (OTCMKTS:INOH
) crashed hard wiping 36% of its value and closing the day at $0.0047. The stock of Terra Tech Corp. (OTCMKTS:TRTC
) also suffered a correction despite the fact that they were granted special permits for cultivation and production of marijuana just a couple of days ago. The stock dropped by 5.6% and closed at $0.59.