Arcis Resources Corp (OTCMKTS:ARCS) Spurred on by an Upcoming Stock Split
After sitting idle for a while, Arcis Resources Corp (OTCMKTS:ARCS) first moved up on Monday. More than 28 million shares changed hands in a matter of six and a half hours and the ticker gained 113%, finishing the day at $0.0032 per share. A couple of quiet days followed, but yesterday, ARCS entered the spotlight again.
An even stronger volume of about 29 million shares was logged and after a 72% jump, the stock reached a close of $0.005 per share for the first time in a very long while.
Quite a nice surge, you have to agree, and the buzz around the internet forums and social networks suggests that plenty of people are excited about the future. But what are they so enthusiastic about?
There hasn’t been any news around the company’s operations or its partnership with MaryJane Group Inc (OTCMKTS:MJMJ). There are no promotions either which is probably a good thing considering what happened the last time ARCS got pumped.
All the hype is coming from the fact that on November 17, each and every ARCS shareholder will receive one additional share for each five shares he/she owns. In other words, there will be a 1.2 for 1 forward split.
People are putting their money on the line in the hope that they will be able to get a return on it after the split, but some of them are probably forgetting the fact that their potential profits are dependent on the stock performance. This, in turn, can be influenced by several other factors.
It depends, for example, on whether ARCS can carry out their business plan, and we should point out that so far, they haven’t done much to prove to us that they can. At the end of Q2, they presented their shareholders with the following figures:
- total assets: $104 thousand
- current liabilities: $493 thousand
- quarterly revenues: $21 thousand
- quarterly net loss: $122 thousand
The management team will need to improve the balance sheet if they are to be taken seriously and the lack of news doesn’t really suggest that they’re doing much on that front. Still, the Q3 report should be out within the next few days which means that we’ might be surprised really soon.
The thing is, another disappointing set of figures isn’t the only thing that could be threatening ARCS. Even if the company manages to log some meaningful revenues and even if it patches up the balance sheet, the ticker could still be depressed by a massive number of shares hitting the open market.
And unfortunately, the odds of this happening aren’t as low as the shareholders would like them to be. Between February 27 and August 20, ARCS printed a grand total of 880 million brand new shares of common stock. Of them, nearly 375 million saw the light of day as a conversion of debt at an undisclosed price. Those 375 million shares are not restricted.
