Worlds, Inc. (OTCBB:WDDD) Continues Sliding After Activision Blizzard Trial Gets Delayed

WDDDchart.pngWorlds, Inc. (OTCBB:WDDD) were founded in the distant 1994 and through their 3d technology are offering multy-user environments consisting of media graphics, text chat, voice-to-voice communication and e-commerce. Throughout their long history the company has managed to gather a number of patented technologies and now these patents are the only thing keeping them afloat.

Between mid 2001 and 2007, WDDD was forced to limit their operations and at times even halt them altogether due to lack of liquidity. They were able to raise small amounts of capital through equities and convertible debt and decided to use the only thing in their possession. Thus in 2008 they filed a lawsuit against NCSoft, one of the biggest game publisher, for patent infringement. Apparently their claims had some merit and the companies settled out of court for and undisclosed sum.

Encouraged by this initial success, last year they found an even bigger target in the face of Activision Blizzard, Inc. (NASDAQ:ATVI). WDDD has filed 59 claims of infringement across 5 patents. And since last September when the date of the patent claim construction hearing, also called a Markman hearing, was set for June 27, 2013, their stock has gained more than 400%, reaching a 52 week high of $0.54.

But for a fourth day in a row the ticker has been losing ground, with the biggest drop happening yesterday when it crumbled by 20% on almost record volume of 3 million shares. Currently the stock is sitting at $0.328 but in early trading today it is down by another 17%. There are several reasons for this negative trend.

4ACCSchart.pngFirst the date of the much expected hearing has been moved to august due to the judge being caught up in another case at the moment. But investors have waited for half an year already so two more months aren’t such a big deal. A bigger concern is the toxic funding acquired by WDDD on March 20 amounting to $2.3 million, with $1.95 million of them are deposited to the company’s bank account but are not freely usable. Looking at their financials we couldn’t find anything encouraging. They finished the period ending March 31 with the following results :

  • $248 thousand cash
  • $2.4 million total current assets ($1.9 million of them in restricted cash)
  • $5.8 million total current liabilities
  • no revenues
  • $331 thousand net loss

22LOTEDchart.pngDespite the disappointing results the CEO of the company, Mr. Thomas Kidrin received compensation of $890 thousand for his services in 2012. Not to mention that during the annual shareholder meeting on July 15 the authorized amount of common shares is expected to be increased to 150 million.

During yesterday’s session the stock of African Copper Corp (OTCBB:ACCS) was crushed under the Victory Mark promotion. They lost 75% leaving many investors scrambling to recover their losses. Another company that has been unable to stop its plummet towards the bottom is Lot 78, Inc. (OTCMKTS:LOTED) who went down by another 42%.

WDDD are nothing but a patent play and that is the only reason investors are showing interest in the company. In the coming months the stock might continue falling due to the possible dilution.

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