Ubiquitech Software Corp (PINK:UBQU)’s Stock Shows Some Strange Behavior
After very little in terms of trading for the last couple of years we saw some movement around Ubiquitech Software Corp (PINK:UBQU) and the excitement reached its highpoint on Friday when the ticker gained an impressive 72% in just one trading session. The thing is, we’re not sure exactly what is the reason behind the massive peak in performance and the huge volume.
Unlike most of the companies that we review every day, UBQU have not been pumped by paid newsletters and the fact that they have not used optimistic press releases in order to grab the investors’ attention is even more perplexing. What this means is that we will have to rely only on their website and, of course, on their financial report in order to see what caused all the hype.
Our research wasn’t off to the best of starts when we opened their website. They are doing business through a wholly owned subsidiary called Hook Wireless and that is probably where most of the people will look for information on UBQU. Despite that, the management doesn’t seem to be too bothered about their connection with the general public and Hook’s website is as simple as it gets – a couple of pages and a contact form.
They do have a Products page where you can see a couple of mobile phone models through which you will be able to use two phone lines at the same time and at the bottom of the page, UBQU are telling us to look for these devices in convenience, liquor stores, gas stations and corner shops. Right now, however, you probably won’t be able to find them in any of those places. At least that is what their latest financial report says.
UBQU were selling the mobile phones through kiosks in Taiwan until recently, but that was discontinued back in November 2012. Now they would like to enter the American market and they say that they are negotiating partnerships with liquor and convenience stores as well as independent 7-Eleven shops.
They have even included a detailed business plan of sorts in their report which discloses what exactly their plans are, the companies that will help them develop their business, how it’s going to be managed etc. Considering the fact that they are in the Pink tier on the OTC Markets, the additional information is definitely a positive thing. The only question that remains is: “Can they do it?”.
Well, the next financial statement will give us a clearer picture, however the figures that we found in the latest report are not too promising. Entering the highly competitive market of mobile phones will require quite a lot of investments and, unfortunately, as of the end of February, things were not looking too good financially for UBQU. Here’s a recap of the most important figures:
- cash: $5 thousand
- current assets: $10 thousand
- current liabilities: $86 thousand
- quarterly revenue: $3 thousand
- quarterly net loss: $10 thousand
We’re not sure if $10 thousand will be enough to get the ball rolling in the US, but even if they do manage to do it, they will still need to think about selling the mobile phones at a profit since, their previous financial statements reveal that they have been working at a loss when they were trading them in Taiwan. Only time will tell if they’ll be able to do it, but in the meantime we’re not too sure about one or two things.
Like, for example, the fact that they quote their president, Mr. Alex Osborne, who is a 23 year-old Bachelor of Arts, as “an experienced entrepreneur”. And we’re not sure if the 1 million preferred shares that the company CEO, Mr. Chih Wei Chang, received as compensation is the most logical move in the world considering the fact that the company is in a distressed financial state at the moment.
All the preferred stock of course is freely convertible and if Mr. Chang deems it necessary, he can get 100 million common shares in exchange for his compensation, which is something that you should probably bear in mind when you are weighing the risks of a potential investment in UBQU.