Baltia Air Lines Inc (OTCMKTS:BLTA) Takes Off Again
A certain Richard Branson once said that the easiest way of becoming a millionaire is to start off as a billionaire and then open an airline. The people who stand behind Baltia Air Lines Inc (OTCMKTS:BLTA) have probably never heard these words.
The company was incorporated a while ago and it set itself an ambitious task – becoming “America’s newest airline“. They noticed that there is no scheduled nonstop service between New York and St. Petersburg, Russia and decided to make one. They bought a Boeing 747 during Q4 of 2010, but for various reasons, they are still unable to get it off the ground.
Unfortunately, the same thing can be said about the stock. Trading hasn’t been particularly active over the last couple of years and, apart from a few brief spikes, BLTA has never really managed to make any sort of consistent run up the charts. Is there anything to suggest that this is about to change?
Well, the ticker hasn’t registered a red session since June 24. Back then, it was sitting at $0.018 whereas right now, it’s hovering just above the $0.03 mark which means that in a matter of just seven sessions, it has gained around 83%. The question is: “Can it hold on to the current levels?“.
Judging by the posts around the message boards, some people believe that BLTA will finally be able to show us that it’s a solid investment opportunity. They reckon that although there are no official announcements confirming this, the end of the scheduled maintenance of the Boeing is near and that the certification process is progressing along nicely.
Others, however, are a bit more skeptical. Some bloggers weren’t convinced four years ago and we doubt that they are much more enthusiastic right now.
In actual fact, BLTA‘s latest 10-Q doesn’t really give investors many reasons to cheer. Here’s a summary of the most important figures:
- current assets: $530 thousand in cash
- current liabilities: $2.1 million
- NO revenue since inception
- quarterly net loss: $2.6 million
As you can see, BLTA is in a rather big financial mess and if you take a quick look at the older filings, you’ll see that this has been the case for a while. You’ll also spot another problem – dilution.
Between April 15, 2013 and March 31, 2014, the O/S count grew by more than 1 billion. The latest report tells us that during the first quarter of this year, 65 million shares were issued in exchange for services and a further 241 million were sold for cash.
The resulting dilution is putting tremendous pressure on the price, but things could get even worse if the aforementioned stock hits the open market. That’s because the shares were issued at levels that are way below the current price.
The ones printed in exchange for services, for example, were valued at around $0.01 a piece while the 241 million shares were sold for just $1.1 million ($0.0047 per share).
In conclusion, there’s no shortage of people who can benefit from BLTA‘s current climb. Unfortunately, unless the company succeeds in convincing everyone that it’s making some actual progress, the regular investors won’t be among them. That’s why, careful evaluation of all the risks is absolutely essential.
