American Community (OTCMKTS:ACYD) Can’t Be Stopped
Penny stocks are quite famous for their volatility. Sharp surges in the right direction are, more often than not, followed by huge drops that leave a lot of investors disappointed. Sustained growth in the share price seems like nothing but a distant dream for most of the small cap ventures which, in turn, means that a fair few of the traders are a bit reluctant to trust their money with a particular stock in the long run. American Community (OTCMKTS:ACYD), however, is making an exception to the rule. At least for now.
The ticker’s performance over the last couple of months has been absolutely astonishing. ACYD completed the acquisition of Wialan Technologies at the end of August and, apparently, this was enough to get everybody extremely excited. The ticker shot out of the double-zero territory and has been climbing ever since. There have been a few corrections, but virtually all the red sessions have been compensated by stronger surges north and, after a particularly intense run last week, ACYD finished Friday’s session at a new 52-week high of $0.071 per share. Even early trading today seems positive – less than an hour after the opening bell, the ticker is already up by about 8%.
This sort of movement did come as a bit of a surprise for a lot of people. ACYD‘s business plan was quite a bit different prior to the acquisition of Wialan and it’s fair to say that the previous management team failed catastrophically with getting it up to speed. In addition to this, ACYD has something of a history with paid promoters – a few campaigns from 2011 and 2012 left quite a lot of people badly burned and these two factors suggested that investors might want to take it easy and tread carefully before jumping in. It’s clear, however, that the people who took the helm when the merger was completed managed to persuade traders that this time, the company really is going to fly. Are we persuaded?
Well, we mentioned in our previous articles that Wialan does appear to be an actual operating entity. The news coming out of the company HQ sounds good and the fact that the current management team is willing to communicate with their shareholders through conference calls is also a plus point. The stock isn’t being pumped which is another advantage considering the fact that, more often than not, when a private venture merges with a publicly traded penny stock, the promoters are quick to begin touting the new ticker.
The only niggle is, we still have no idea about Wialan’s current financial situation. There is little doubt in anyone’s mind that the revenue generation has started a while ago (which is more than can be said about other small cap ventures like Bison Petroleum Corp. (OTCMKTS:BISN) and Pan Global Corp. (OTCMKTS:PGLO)) but, unfortunately, we don’t know how successful the business is and no one can guarantee that the bottom line is positive. If the figures are not in line with investors’ expectations, the price could take a heavy blow.
And we must say that investors’ expectations are quite high. Message boards are flooded with predictions that prices such as $0.50 per share, or even $1 per share are coming in the not-so-distant future. Estimating how plausible these sort of levels are is quite difficult at the moment, but one thing is for sure – ACYD‘s current market cap is nudging the $180 million mark, which is, we reckon, a bit steep for a company that has yet to show us their balance sheet.
When the report comes out, we’ll know if the current levels are a low entry point, or a peak that may never be reached again. Until then, weighing your risks carefully and considering all the options is absolutely crucial.
