Aqua Power Systems Inc (OTCBB:APSI) Bounces
Yesterday the stock of Aqua Power Systems Inc (OTCBB:APSI) bounced hard gaining over 56% and closing at $0.075 per share. Despite the impressive performance investors who bought into the stock just 8 sessions ago would still be facing losses of over 90%. That is right, in just a handful of sessions APSI crashed from more than 81 cents to less than 5 cents. The question is will yesterday’s reversal turn into a more prolonged recovery?
Although APSI‘s balance sheet is not exactly what one would call encouraging it is also not atrocious. The latest quarterly report contained the following results:
• $51 thousand cash
• $626 thousand total current assets
• $222 thousand total liabilities
• $354 revenue
• $175 thousand net loss
Keep in mind that this doesn’t include the new subsidiary of the company that has generated $200 thousand in its last fiscal year. Another positive step was the cancellation of 105 million outstanding shares that were exchanged for 1.5 million Series A preferred stock. Currently APSI has approximately 59 million outstanding shares, 32.9 million of which are owned by the CEO. The other 26.1 million of the outstanding shares should get your attention though.
A few years ago when APSI was still operating under the name NC Solar Inc a group of shareholders agreed to sell 1.45 million shares at a price of $0.15 each. As a result of the 18-for-1 forward split implemented last year those 1.45 million shares were turned into the aforementioned 26.1 million free trading shares. This means that some people could own millions of underpriced shares that they could unleash on the open market for massive gains.
In the world of pennystocks this situation usually leads to a paid pump being launched for the stock. This is exactly what happened when a couple of weeks ago a landing page touting APSI was put online. According to the overly-enthusiastic statements made by the pumpers APSI has “the potential to double, triple, or quadruple your investment”. As we told you earlier in reality the stock wiped more than 90% of its value.
The heightened volatility displayed by the stock certainly creates opportunities for some quick gains. The risks surrounding APSI, however, are enormous and any trades should be preceded by extensive research.
In early trading today the stock is continuing its recovery currently sitting 9.3% in the green at $0.082.
