Artesanias Corp (OTCMKTS:AXTR) is Losing Heat
Is Artesanias Corp (OTCMKTS:AXTR) a dangerous penny stock? Of course it is.
Virtually all penny stocks are dangerous and people lose money on them every day. AXTR is, of course, no exception. Out of the last six sessions, only one ended in the green and the ticker managed to wipe out about 36% of its value.
The thing is, you don’t really need to lose more than a third of your investment to find out that AXTR probably isn’t your best bet. All you need to do, in fact, is some due diligence.
The corporate headquarters is a good place to start. AXTR is a public company that, even after the drop from the last few days, has a market cap of nearly $25 million. And this isn’t really in line with the location of their principal office which, by the looks of things, is a nice residential house in Fort Worth, Texas.
And speaking of things that are not in line with the market cap, we can’t fail to mention the latest 10-Q which is absolutely appalling. The figures for the first quarter look like this:
- total assets: $21 in cash
- current liabilities: $29,943
- NO revenue since inception
- quarterly net loss: $25,272
In the interest of fairness, we should probably note that some changes happened to AXTR‘s business plan a couple of weeks ago. The company was previously trying (and failing) to sell hand-made pieces of art that come from Panama, but at the end of May, a licensing agreement shifted the focus towards the video gaming industry. Later, some money was raised through the help of a convertible note which can be turned into stock at a 40% discount.
The new business plan might just bring some more decent figures in the future financial statements, but as you probably know, solid operations don’t always result in solid stock performance, especially when the pumpers are involved. And, unfortunately, quite a few pumpers seem to be involved with AXTR.
Last month, investors started complaining about cold calls advertising AXTR‘s stock. Some even went as far as describing the people on the other end of the line as the protagonist in a 2013 movie starring Leonardo DiCaprio. The newsletters also jumped in last week and so far, we have received more than twenty emails from a variety of promoters. The latest batch of alerts costs $25 thousand and it was sent out by Damn Good Penny Picks and the rest of the newsletters owned by Stellar Media Group LLC.
In and of itself, the pump isn’t really that much of a problem. The real issue lies with the fact that there are people who can profit from the increased liquidity. The holders of the convertible note we talked about earlier, for example, could convert the debt into cheap shares and walk away with substantial amounts of money. A few other people could be in an even better position.
During Q2 of last year, the people in question bought a total of 1,800,000 shares of AXTR common stock at a price of $0.015 apiece. A few months later, those people went through a 12 for 1 forward split and immediately after it, they held 21,600,000 shares for which they originally paid a grand total of $27,000.
Who knows, one day, Martin Scorsese might decide to make a movie about them as well.
