ALAS International Holginds, Inc. (PINK:VDSC) Soars on News
Yesterday ALAS International Holginds, Inc. (PINK:VDSC) announced a merger with a public company based in Greece. After spending an hour and a half completely flat in early trading, VDSC ran completely wild the moment the news hit the wire and closed the day 220% up, shifting nearly half of its outstanding share volume.
VDSC announced a merger with a privately held Greek company that runs short cruises around the Greek islands. According to the press release the merged will consist of Hydraiki Naval Company paying $12.5 million for 25 million VDSC shares priced at $0.50 each, or about 100 times more than the last closing price of VDSC. The justification for this suspicious move is that the private company strongly believes VDSC shares are currently severely undervalued.
Investors would best decide for themselves whether VDCS is undervalued or not, going off on the company’s most recent filing, a quarterly for the period ended December 2012:
- ZERO in cash
- $960 thousand in current liabilities
- ZERO in quarterly revenue
- $762 thousand in quarterly net loss
VDSC managed to issue 78 million free trading common shares over 2012. About half of those were issued at a price that is 84% below yesterday’s close. That’s without counting the 164 million restricted shares issued over the same period. The shares were mostly issued for ‘services rendered’, debt conversion and cash placements.
VDSC is also a pink sheet company and filings are sparse, so traders hoping for an official filing reflecting yesterday’s merger news may need to wait until their next quarterly report to find any hard information confirming the deal. VDSC has a history of loud and proud news touts that fizzled in thin air once the filings came through.
In early 2012 the company announced that it was in the process of acquiring a large luxury cruise ship, The Emerald, that would generate about $10 million in revenue from a charter agreement at the Korean World Expo 2012. Sadly, revenue numbers that even come close to this figure never appeared in the company’s filings. The luxury liner itself happened to be examined by scrappers as early as 2011 and departed to a scrapyard in mid-2012.
With at least one misleading press release in the company’s past, all traders who try to chase yesterday’s press release-driven highs and end up burned will have no one to blame but themselves.
