CD International Enterprises Inc (OTCMKTS:CDII): A Love or Hate Story
Can a small sub-penny OTC company strike a deal that will bring as much as $350 million in revenues over the next twenty-four months? Well, CD International Enterprises Inc (OTCMKTS:CDII) is a small sub-penny OTC company and about a week ago, they announced just that.
Ever since, the stock has been firmly on the list of the most heavily traded OTC tickers. Although yesterday’s session was quite a bit calmer than the ones before it, CDII still managed to rack up a dollar volume of about $740 thousand which, in itself, is quite a feet.
So, the news sounds good and people are paying attention. That’s that, then.
Well, let’s not leave it there. Let’s go back to our initial question and elaborate.
Can a small sub-penny OTC company that shares its office with another penny stock enterprise called Pen Inc (OTCMKTS:PENC) and an accounting firm strike a deal worth $350 million?
And is it possible for CDII to become so successful all of a sudden considering the woeful-looking report for the quarter ended June 30?
For those of you who have not had the chance to look through the 10-Q, here’s a summary:
- cash: $24 thousand
- current assets: $1.2 million
- current liabilities: $7.2 million
- quarterly revenue: $75 thousand (a 65% drop on a year-over-year basis)
- quarterly operating loss: $2.2 million
Each and everyone of you should answer the questions we posed on their own. It must be said, however, that some people are not convinced.
Although the PR about the massive purchase order was followed by an 8-K form, the OTC Markets placed a Buyer Beware stamp on the company profile on the very same day which goes to show that they are bit worried about the things happening around CDII. The same goes for investors.
The press release propelled the ticker on an absolutely astonishing run which resulted in a peak of more than $0.03. Since then, however, CDII has been crashing down and after another 13% loss yesterday, it slipped back down in sub-penny land.
So, there you go – some people really believe in the massively optimistic press release from December 2 while others are pretty sure that something’s fishy. As we have said numerous times on these pages, it’s up to you to decide which position you should take. In the meantime, we’d like to touch upon an undeniable fact – the stock has been devastatingly diluted over the last few months.
On August 24, when the latest 10-Q saw the light of day, the number of issued and outstanding shares stood at just under 86 million. According to the company profile on the OTC Markets, on Monday, it was pegged at more than 321 million. The next report won’t be due before the end of the month which means that we’ve yet to find out who exactly got the newly printed stock. We won’t be too shocked, however, if a large portion of it has been released on the open market over the last few days.
