AvWorks Aviation Corp (OTCMKTS:SPLI) Hesitates

After months of sitting in the triple zero territory, AvWorks Aviation Corp (OTCMKTS:SPLI) suddenly woke up on January 22 and managed to log as much as 444% in gains after just six and a half hours of trading. It showed some signs of hesitation over the following days, but it recovered and then made another astonishing run in the right direction. Between February 3 and February 19, it logged only one red session and managed to climb all the way to $0.0745. A remarkable achievement, no doubt, but is it surprising?

Not really. The surge was caused by a press release informing us about the merger between SPLI and a privately held company called Vapor Group. There are plenty of things to suggest that the news is good. As we mentioned in some of our previous articles, SPLI failed to get their aviation parts business off the ground (no pun intended) and the new sector means that the company gets another chance.

What’s more, Vapor Group looks like a revenue generating entity and although neither the press release, nor the company website states it explicitly, some people think that their e-cigarettes can be used with cannabis related products. This means that the market now perceives SPLI as a pot stock and we all know that these tickers have been going through the roof over the last couple of months.

All in all, there’s no shortage of factors that could justify the impressive run up the charts, but there are also some things that could hamper the ticker’s progress in the long run. Chief among which is the lack of any financial information about the newly acquired subsidiary.

SPLI did file an 8-K form about the merger, but it didn’t contain Vapor Group’s balance sheet. They made absolutely no announcements after the press release about the acquisition as well which meant that sooner or later, the enthusiasm was going to die down a bit.

Sure enough, we’ve seen some quite serious corrections over the last couple of sessions. On February 20, the ticker slipped and lost around 7% of its value, on Friday it wiped out another 13%, and yesterday it dropped by 16.6%. In other words, SPLI slid from $0.0745 to $0.05 per share in a matter of three trading days.

Today’s session isn’t off to the best of starts as well. The ticker did manage to display some upward movement during the first half an hour, but it then experienced a sharp reversal. About forty-five minutes after the opening bell, SPLI is sitting at $0.045 per share (10% below yesterday’s close).

Surprisingly or not, message boards and social media websites are still buzzing with activity. Some traders claim that the drop is nothing more than a healthy consolidation that should form the base for a more prolonged run in the right direction. Others say that it is caused by the more risk averse investors who are taking their profits while they still can. The general opinion is that the current levels are a huge buying opportunity for traders. Is that the case though?

We’ll leave it up to you to decide. The ticker might manage to wake up and recover, but without an update from the management team, it will have some serious trouble doing it. The long term performance can only be decided by the business operations and the future financial statements and, as we all know, there are still some unknowns around them.

One thing is for sure – doing a lot of due diligence and treading extremely carefully is absolutely essential.

SPLI wasn’t the only ticker to start the new week on the wrong foot. Intelligent Living Inc (OTCMKTS:ILIV) logged an impressive $1.5 million in dollar volume, but unfortunately, it lost nearly 30% of its value along the way. Fastfunds Financial Corporation (OTCMKTS:FFFC), on the other hand, managed to shift around $500 thousand worth of shares while wiping out 26% of its price.