Bitcoin Shop Inc. (OTCMKTS:BTCS) Reveals Depressing Quarterly Results
On Friday the stock of Bitcoin Shop Inc. (OTCMKTS:BTCS) was able to once again place among the most traded pennystocks. More than 4.4 million shares were exchanged throughout the session resulting in a dollar value of 650 thousand. Unfortunately for its shareholders though the rise in traded volume did not signal a change in investors’ sentiment and BTCS continued crashing down the chart.
Investors were quite eager to sell their holdings with most of the volume posted at the start of the session. As a result the stock slid down to its new 52-week low of $0.1311 and although it managed to recover a bit at the end of the day it was sitting 7% in the red at $0.159. With this the company has now wiped all of the gains achieved at the end of April. In fact BTCS has managed to close in the green only 4 times since the start of May.
Initially the company described itself as the amazon of bitcoin trying to attract the quickly increasing number of bitcoin enthusiasts at the start of the year. That didn’t turn out so great when the numerous devastating incidents around the unregulated virtual currency caused a lot of that hype to dissipate. BTCS tried to mitigate the risks through diversification and added two more cryptocurrencies- litecoin and dogecoin as payment methods but that was not enough to stop the slide of the stock.
Still, many gave the company the benefit of the doubt and decided to wait and see what the first financial report covering their new bitcoin business would show. Last Thursday that report was filed and it revealed a rather grim picture – BTCS have generated only $11 thousand in revenues. The rest of their financials are:
- $1.4 million cash
- $1.5 million total current assets
- $178 thousand total current liabilities
- $1.4 million net loss
For now the company has enough funds to continue with their operations but unless revenues start growing BTCS will have to sell more of its common stocks. And investors shouldn’t forget that there are still around 266 thousand series B preferred shares that were issued to note holders of the company. Each preferred B share can be converted into 100 common shares, or a total of 26 million new common shares could hit the market.
With the underwhelming performance of its online shop and the prospects of further dilution it is important to do your own research and take into account all of the risks before attempting any trades with the stock.
On Friday the marijuana industry continued to suffer with another company getting suspended from trading by the Securities and Exchange Commission. This time they targeted the stock of FusionPharm, Inc. (OTCMKTS:FSPM) due to “lack of current and accurate information”. This was the fifth marijuana pennystock that got suspended for the past 3 months prompting the SEC to issue an official statement warning investors about the various risks around the industry.
