Cal Dive International, Inc. (OTCMKTS:CDVI) Drops Further Down

At the end of last week the stock of Cal Dive International, Inc. (OTCMKTS:CDVI) registered another severe correction. Despite opening at $0.19, significantly higher than its previous close, the stock quickly began sliding down the chart and at the time of the closing bell it had wiped more than 28% of its value and was sitting at just 10 cents per share.

The month of October was simply horrendous for the company’s stock with only a single session ending with gains. The depressing chart performance has resulted in a loss of over 90% of the share price. Back in September the company was warned that their stock no longer met the minimum bid requirements of the NYSE national exchange. CDVI announced that they will try to boost investor confidence but their efforts were futile – last Thursday the company was delisted from the NYSE exchange and was placed on the Over-The-Counter market.

Compared to the rest of the pennystock companies Cal Dive’s balance sheet features numbers that are an extremely rare sight but having hundreds of millions in assets in no way means stable operations. The latest quarterly report revealed that at the end of June CDVI had:

• $2.5 million in cash
• $225 million in current assets
• $372 million in current liabilities
• $121 million in revenues
• $29 million in net loss

There were some red flags pointing to the discouraging situation of the company. Back in March the CFO stated that he was confident that significant improvement could be made but just three months later he submitted his resignation. On June 3 CDVI sold one of its fleets and received $18.5 million cash but as the quarterly showed they still ended the period with a sizable net loss.

The poor results reported for the first half of 2014 had an even grimmer implication –CDVI became non-compliant with the terms of its loan facilities. They have been trying to resolve the issues but judging by the last couple of press releases things are not going smoothly. The last PR came on October 16 and although it reported that significant progress has been made so far nothing is finalized. In fact they warned investors that there is no assurance that an agreement will be reached.

The huge indebtedness and the delisting from the NYSE are too serious to be ignored. Still, the stock has been depreciating for a prolonged time and a bounce is not out of the question. The problem is that without any positive updates about the negotiations the stock will most likely return to sliding towards to the bottom. That is why doing your own due diligence before making an investment is paramount.