Worldwide Internet Inc. (OTCMKTS:WNTR) Spikes on Microsoft PR
Yesterday Wordwide Internet Inc. (OTCMKTS:WNTR) announced that their portfolio company I-Texts, Inc. has signed none other than Microsoft as a new advertiser and the news certainly created a lot of excitement around their stock. The ticker spiked up the chart and reached an intraday high of $0.003 but even the name of the software giant couldn’t help them maintain such prices.
Still, at the time of the closing bell WNTR stood at $0.0016, which is 14% higher than the previous close. Throughout the session investors managed to shift more than 85 million shares surpassing the average volume for the company by more than 10 times. Despite the double digit gain the stock is still precariously close to its 52-week low of $0.0011, last revisited at the end of October.
Investors certainly have quite a lot of reasons to be cautious when dealing with WNTR. The latest quarterly report revealed that at the end of June it had:
• $2525 cash!
• $661 thousand total current assets
• $4302 total current liabilities
• $295 thousand revenues
• $33 thousand net income
It may be true that the bottom line was positive but the cash reserves remain atrocious. Not to mention that almost all of the current assets consist of accounts receivable. WNTR has also been consistently issuing more and more shares. At the end of 2013 there were 707 million outstanding shares while six months later that number had grown to 1.26 billion. The OTCMarkets profile page shows that as of November 6 there are 1.46 billion outstanding shares.
The red flags don’t stop there though. A consolidated company audit was supposed to be completed by September 30 but now, more than 6 weeks later, no information about it has been disclosed. Worth mentioning is the fact that WNTR uses a virtual office as its official headquarters.
In order to entice investors the company announced that they will be paying another dividend. This time shareholders of record on October 31 will receive one I-Texts share for every 1000 WNTR shares they own.
The next financial report should be filed by Friday and if it shows some improvements the stock could move upwards. The multitude of red flags, however, are simply too serious to be ignored and any trades should be attempted only after doing your own due diligence.