Sauer Energy Inc (OTCMKTS:SENY) Refuses to Move

$15 thousand was set aside for the promotion for Sauer Energy Inc (OTCMKTS:SENY). The Next Big Trade is the entity that received it and it looked like it was money well spent. At least during the first few minutes.

The ticker opened the first session of the week with a gap up at $0.026 and it immediately set its sails North. Minutes later, an intraday high of almost $0.04 was reached, but just as everyone was getting all fired up, SENY tripped and fell. It tumbled down to a close of just $0.022 – 10% below Friday’s value and inches away from a new 52-week low.

So, the pumpers failed rather spectacularly at lifting the share price, but on the silver lining side of things, their touting did result in the first properly active session in a very long while for SENY. But does the stock have what it takes to keep investors interested?

Unfortunately, the 10-Q isn’t very convincing. In fact, it looks like this:

  • current assets: $27 thousand in cash
  • current liabilities: $786 thousand
  • NO revenue
  • net loss: $602 thousand

PR activity isn’t really abundant, either. The latest announcement, for example, is now two months old which could be an excruciatingly long time in Pennyland. That said, the news has been good. SENY have made several important steps towards finally commercializing their wind turbines and their recent move to a new, more spacious headquarters seems to be among the biggest of them.

So, shareholders can at least keep their fingers crossed and hope for some more good news in the weeks and months to come. They should also keep their eyes peeled, however, and they might want to pay particularly close attention to the share structure.

Some years ago, SENY issued a few notes which were originally convertible at a fixed rate of $0.25 per share. When the stock fell below that point, however, the terms provided the note holders with another option – a variable conversion rate of 60% of the lowest trading price in the 25 trading days prior to the conversion notice.

As a result, quite a lot of stock saw the light of day at a discount over the last few months. Here’s an example: on June 30, when the ticker was hovering around the $0.03 mark, SENY printed 1.4 million shares at just $0.017 apiece. Nobody can say for sure how much more convertible debt is currently outstanding which means that nobody can say for sure how much more dilution could be coming SENY‘s way. That’s why, considering the risks is crucial.

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