Steampunk Wizards Inc (OTCMKTS:SPWZ) Keeps Sliding
After an exhilarating blastoff to over two dollars per share in July, the stock of Steampunk Wizards Inc (OTCMKTS:SPWZ) has since cooled off significantly on the charts. Yesterday SPWZ slipped over 14% and stopped at $1.47 by the closing bell.
SPWZ was formerly called Freedom Petroleum Inc – a shell company that executed a reverse merger with a Maltese entity called Steampunk Wizards. The prerequisites set forth in the merger and share exchange agreements were met in August and the company announced the deal was closed on Aug 21.
The former business plan pursued by Freedom Petroleum was abandoned and the company is now actively working to forward the business of the Maltese entity. Prior to the merger Steampunk Wizards was working on developing video and mobile games and related merchandise. Even though the filing states SPWZ has a game which is “nearing commercial launch”, the game has actually been out for a few months now, available on both leading mobile storefronts.
Even though the app has got between 10 and 50 thousand downloads and favorable ratings on the Google Play Store, the financial information published in the combined financial statements available in an 8-K filing show that the game may not be as successful as it looks.
The Maltese game developer was nearly cashless, with just $2,500 in cash as of March 31, 2015. It also managed to log bigger net loss in five months that the OTC shell did in eight. The strangest part is that the reverse merger entity did not record a dime in revenues, even though its free-to-play mobile game has an in-app purchase option and has been available for months.
With all this in mind, even SPWZ‘s current humble market cap of just under $40 million may seem like a generous valuation to more conservative traders.