Amazonas Florestal (OTCMKTS:AZFL) Shoots out Of Triple Zero Land

Amazonas Florestal (OTCMKTS:AZFL)’s 12% jump on Friday allowed the ticker to once more jump out of zero territory with a bang.

A dollar volume of nearly $400 thousand is nothing to scoff at, especially when stock prices are as low as $0.0018. Still, under the circumstances, it is not really hard to understand why investor interest in the company would suddenly reawaken.

Although AZFL‘s low working capital is certainly a problem, the bigger issue at hand appears to be the fact that the company can’t seem to find a buyer for its inventory. This is why investors flew into a buying frenzy once it was announced that this state of developments may soon change.

True enough, the announcement the company made was vague, but it seems to have convinced enough people to commit to the company’s stock. Plus, once AZFL manages to restructure its timber operations in Brazil and assume a better position for future revenue and growth, cash on hand will no longer be an issue, right?

Let’s just say that this could indeed happen, and if it does it will undoubtedly create investor value. However, the whole thing may just as easily turn out to be a publicity stunt or something of the kind. After all, it’s hardly unheard of for OTC Markets penny stocks to use underhanded tactics of the like to further their own ends.

Another thing investors would do well to take into account in this case is dilution. As of September 30, 2013 AZFL had 414 million shares outstanding. The latest reported number for the outstanding share count is now 658 million, and if rumors are to be believed, that may have increased to 876 million since the last filing.

Investors should probably keep these things in mind when considering this “ground floor opportunity”, as some may call it.