Axion Power International, Inc. (OTCMKTS:AXPW) Gets Smashed
Friday saw Axion Power International, Inc. (OTCMKTS:AXPW) crash 9.37% on a huge dollar volume in spite of its positive announcement. The crash only intensified after the weekend break – so what happened here?
Well, naturally since we’re talking about an OTC Markets company that is sparse with detail, we can’t be entirely sure why the ticker crashed so horribly all of a sudden. However, due diligence reveals some pretty disturbing facts about AXPW that may have something to do with its crash.
Take, for instance, the numbers in its latest financial report:
- Cash and cash equivalents – $1 million
- Total current assets – $8.8 million
- Total current liabilities – $8.7 million
- Net Sales – $600 thousand
- Net loss – $7.3 million
Those don’t look too shabby – until you take a more careful look at the numbers. Once you do, it turns out that $7.15 million of the company’s current assets are in the form of “restricted cash”, consisting of a “deposit of an additional $7.15 million into a series of control accounts in our name”.
At the same time, all but one million of the company’s liabilities consist of convertible debt.
At this point, perceptive investors would have probably seen where this is going. As we’ve said – there’s no way to be sure, but maybe, just maybe… holders of cheap shares saw Friday’s press release and decided that this bit of fresh optimistic news would push AXPW upward and decided to cash-in on the action, while the spotlight was still on the company.
Investors should really take that possibility into consideration, when making up their mind about AXPW stock, and act accordingly.
