Ubiquity Inc (OTCMKTS:UBIQ) Takes A Step Back
After surging by more than 18% on Thursday the stock of Ubiquity Inc (OTCMKTS:UBIQ) failed to maintain its share price and on Friday it tumbled down by 5.74% for a close at $0.33. The loss wasn’t that scary but will the negative sentiment grow stronger during the weekend?
Especially when at the current price of its stock UBIQ commands a market cap of more than $41 million. This is a truly egregious valuation for a company that finished the quarter ended September 30, 2015, with:
• $142 thousand cash
• $464 thousand total current assets
• $10 million total current liabilities
• $9,400 revenue
• $3.45 million net loss
UBIQ may have announced a $3.75 million licensing agreement with Dash Radio but that sum will be received over the period of 5 years with 60% of the amount coming in the last two years.
You might have noticed that we are still relying on financials that are quite outdated and the reason for this is UBIQ‘s failure to file its last couple of financial reports on time. Even the one covering the third quarter of 2015 was filed less than two weeks ago, on May 4.
You don’t have to dig much deeper to find even more red flags, though. Just open the OTCMarkets profile page of the company and you will be greeted by the Caveat Emptor skull and crossbones warning sign. Now add to it the fact that UBIQ has been targeted by paid pumps on quite a few occasions with the latest email alerts coming last Thursday from the infamous pumper The Wolf of Penny Stocks. For this attempt to create as much artificial hype as possible the so-called Wolf bagged a rather hefty compensation of $45 thousand. As for its previous UBIQ pumps the newsletter has received a total of $107,500.
Almost always when a pennystock is being pumped that means that there are millions of extremely cheap shares that could be unleashed on the open market, and UBIQ is not an exception. During the first nine months of 2015 the company sold around 24 million shares for $2.1 million in proceeds. Subsequent to September 30, however, over 55 million shares were sold for just $1.8 million in proceeds, making the average price of each share just $0.03.
Approach UBIQ with caution and only after doing extensive due diligence.
