Bitcoin Shop Inc. (OTCMKTS:BTCS) Gets Dumped to the Ground

At first it seemed that the momentum had managed to survive the weekend and on Monday the stock opened with a gap up at just below 40 cents and even surged up to an intraday high of $0.44 but such heights proved to be too much to sustain. Sliding down for the rest of the trading day the ticker barely managed to stop just 2.3% above its previous close. Yesterday it didn’t have such luck. 

Right from the get-go BTCS plummeted towards the bottom of the chart and when the closing bell rang they found themselves devastated with more than 37% wiped clean. During the trading hours the absolute record number of 6.1 million shares got dumped on the market depressing the price down to $0.23.

As the name of the company shows they tried to use the hype around the bitcoin currency from the start of the year in order to attract the attention of the market and the initial reaction was more than overwhelming – BTCS run from around a dollar to more than $5 in just a few sessions. The enthusiasm quickly died off though and now some traders may be facing losses amounting to more than 90% of their investment. 

 
For the last two weeks the company has been silent and even before that their PRs didn’t contain much useful information. On April 14 they moved out of their former “offices” and into a new corporate headquarters, which although a step into the right direction doesn’t help in creating lasting confidence in the stock. Especially when for the last quarter of 2013 the private company that carried the bitcoin business reported less than $30 000 in revenues. 

But investors have more pressing worries in the form of 400 000 preferred B shares and 10 million common shares that were issued to note holders of the company. Each preferred share can be converted into 100 common shares for a total of 40 million shares that could get dumped on the market. It is important to note that the shares were issued after the 1-for-300 reverse split that took place at the end of the January. 

BTCS have expanded their services by adding Litecoin and Dogecoin as valid payment options but they will have to do a lot more in order to overcome the effects of the dilution and the growing pessimism towards the unregulated virtual currencies.The company will have to show some significant improvements in their report for the first quarter of 2014, that should be filed in the next two weeks, if it wants to keep even its current price levels.

Yesterday the marijuana sector suffered another day of harsh corrections with most of the companies involved in it going down in the red by double digit percentages. Terra Tech Corp. (OTCMKTS:TRTC) wiped another 12% and closed at $0.53. This was the seventh session in a row that ended in losses for the company. At the same time Minerco Resources Inc. (OTCMKTS:MINE) suffered a sudden and horrific crash putting an end to its recent recovery. The stocks slashed 30% of its value and went down to $0.025 apparently in a response to the conference call that took place yesterday.