Car Charging Group Inc (OTCMKTS:CCGI) Reverses After a Five-Day Run
How many penny stocks whose name has been featured in a New York Times article can you think of? “Not many” is probably your answer, but there are some and Car Charging Group Inc (OTCMKTS:CCGI) is one of them.
The article itself, was published on November 12 and, as you’d expect, it influenced CCGI‘s performance quite a lot. In fact, the coverage, aided by the joint venture agreement that we talked about last week, propelled the ticker on a five-day winning spree which added no less than 45% to the value. It was clear that the run wasn’t going to last forever and, sure enough, CCGI lost around 10% yesterday shifting more than 345 thousand shares and registering a dollar volume of around $625 thousand.
The question now is: “Is yesterday’s drop just a healthy pullback, or is it a sign of something worse to come?”.
Well, the performance from the last couple of months is not exactly consistent, which might worry some of the shareholders, but, in the interest of fairness, we should point out that a more definitive answer to the above question can be given only after we see how the ticker behaves in the coming days and weeks. The thing is, we sense that the excitement is a bit exaggerated.
For one, the joint venture agreement from last week sounds promising, but it’s still way too early to say for sure how positively it will affect CCGI. As for NY Times’ article, sure, it does give the company quite a lot of exposure, but it’s a general analysis of the uprising EV charging industry. The ticker is mentioned alongside other ventures dealing in the same business sector and because of the general outlook, the author hasn’t set himself the task of digging into the details. As we mentioned in our previous articles, once you do, you’ll find that things are not quite as glamorous.
The latest 10-Q, for example, got published last Thursday and although the stock performance suggests that not a lot of people paid attention to it, there are some things well worth considering. Here’s a rundown of the most important figures found in the report:
- cash: $57 thousand
- current assets: $3.3 million
- current liabilities: $9.9 million
- quarterly revenue: $89 thousand
- quarterly net loss: $7.9 million
On the bright side, the revenues have increased by nearly 15% quarter-over-quarter, but unfortunately, CCGI burned through 65% of their cash reserves along the way. The current portion of the liabilities has also increased by around 11%. It should be noted that the report covers the period before the acquisition of the assets and liabilities associated with Blink Network (formerly owned by the now-bankrupt ECOtality Inc (OTCMKTS:ECTYQ)) which means that the future financial statements should look somewhat different. They should give us a clearer picture of the company’s chances of finally turning a profit, but in the meantime, there’s something else to bear in mind.
A total of four Seeking Alpha articles have appeared over the last month and a half. The authors disclose no compensation, but they seem quite optimistic and talk about things like “the symbiotic future” of CCGI and Tesla Motors Inc (NASDAQ:TSLA) and about CCGI “winning the EV infrastructure war“. You would agree that, at this point at least, these claims sound a touch too bold which, in turn, adds another layer of risk. Make sure you perform all the necessary due diligence and base your investment decision on it, rather than on the optimism flying around the websites and message boards.
