AvWorks Aviation Corp. (OTCMKTS:SPLI) Goes Red Again
Yesterday AvWorks Aviation Corp. (OTCMKTS:SPLI) announced that it had entered into an agreement for the acquisition of 51% of the stock of the marketer of the “American Smoke” brand of premium electronic cigarettes. Despite a strong opening caused by optimistic news, the ticker soon headed south and ended the session 10.34% below its previous close.
Although SPLI‘s crash immediately after an optimistic announcement might appear odd at first glance, it is in no way inexplicable. SPLI‘s present situation can be considered unclear at best. Two days ago the company finally saw it fit to throw some light on the merger it had announced on January 22, 2014. Since the publishing of the official 8-K on that matter has been delayed considerably, the company did well to direct investors to the record of its filings, that are available on the website of the Secretary of State of the State of Florida. So now we know for certain that news of the merger was not just a publicity stunt aimed at pushing SPLI stock up, the like of which we have observed on numerous occasions during the marijuana rush. But is this enough to keep SPLI afloat?
Not for very long, as is usually the case with marijuana stocks in the present volatile market. Admittedly, now that the company has started amending its previous filings “to increase transparency” things look a bit better. The acquisition of American Vaporizer LLC can also be considered a cause for optimism. However, neither of those can compensate for the red flags that are presently dragging the ticker down.
The controversy surrounding SPLI‘s president, for one, is certainly not something a diligent investor can ignore. Mr. Svorai’s had trouble with the law on multiple occasions, which is not really reassuring.
SPLI declared that it is willing to straighten out its financials in the company’s business. That’s commendable, but the statement somehow clashes with the company’s delay of the 10-K that was due 5 days ago. As a result investors might have to wait for another 10 days before they can do proper due diligence on the company by using reliable information. One thing is certain – the information in the report will be worth considering, because depending on what it contains, SPLI could be headed for the very top or the very bottom of the charts.
Another marijuana company that had a good opening but ended up in the red yesterday is Terra Tech Corp, (OTCMKTS:TRTC), who lost 8.77% of its market value in just one day.
