BTCS Inc (OTCMKTS:BTCS) Fails To Move
Throughout yesterday’s trading investors managed to shift nearly 2 million of BTCS Inc (OTCMKTS:BTCS)’s shares. This is the biggest daily volume registered by the stock since November last year. Compared to the current monthly average it is over 5 times higher. In early trading it seemed that the intense trading was going to cause BTCS to soar up the chart with the company reaching an intraday high of $0.134 but the positive momentum quickly lost its strength. By the time of the closing bell the stock had managed to wipe its gains and closed at $0.1051, just 0.1% above its previous close.
The session demonstrates perfectly the sentiment towards the company. Some investors are still excited about the potential of BTCS. And, indeed, the latest quarterly report showed that the revenues generated by the company are 4 times higher than what the company reported for the first quarter in 2015. Furthermore, the net loss has been reduced significantly. The problem is that the balance sheet is still far from encouraging – at the end of March BTCS had:
• $63 thousand cash
• $127 thousand total current assets
• $5.4 million total current liabilities
• $199 thousand revenues
• $2 million net loss
It should be obvious that BTCS‘ financial state is still grim with the company having limited cash reserves and a working capital deficit of approximately $5.3 million.
The biggest obstacle that BTCS is facing at the moment, however, is the liquidation of Spondoolies Tech Ltd. Back in September 2015 the two companies signed a definitive merger agreement while in February, this year, the management of BTCS put 12 million shares in escrow that will be canceled if the merger isn’t completed successfully. And this may very well be the case because on May 4 a district court in Israel appointed a temporary liquidator for Spondoolies. BTCS had invested a total of $2.25 million in the company and this investment has now been determined to not be recoverable. In the latest PR update the CEO of BTCS stated that they will explore all potential claims and will pursue all options prior to the July 14 hearing.
The risks surrounding the stock must be taken into account. Take the necessary time to do your own due diligence before committing to any trades.
