Changing Technologies Inc (OTCBB:CHGT) Continues Its Recovery
On October 14 the stock of Changing Technologies Inc. (OTCBB:CHGT) slid down to its new 52-week low of 60 cents per share. Since then the company has been going nowhere but up and has by now more than doubled its price. Yesterday it jumped by another 14% and closed the session at $1.36. The recovery has certainly been impressive but is there a reason for the sudden change in investors’ sentiment?
Well, CHGT filed its annual report for the fiscal year ending June 30 and it contained the following financial results:
• $26 thousand cash and total assets!
• $54 thousand total liabilities
• ZERO revenues
• $65 thousand net loss
It should be obvious that such numbers simply cannot support the current market cap of over $81 million commanded by the company. Still, it should be noted that the report doesn’t cover CHGT’s current operations. In June they formed the new subsidiary 6 th Dimension Technologies, Inc, exactly one month later the acquisition of SumLin Technologies, LLC was completed and CHGT entered the highly popular 3d printing market.
Even though being involved in the 3d industry almost guarantees a certain level of interest on its own investors have been flooded by PR articles issued by the company. There have been nearly 30 press releases published for the past three months and hardly any of them contained any substantial information. Such an onslaught of fluff PRs is an extremely rare sight even in the world of pennystocks.
But there are even more serious red flags around the stock. Back in October, 2013, (according to the 10-K report), or maybe in November, 2013 (according to the last 10-Q report) CHGT sold 3 million shares for only $30 thousand in proceed. This means that each share was priced at just 1 cent. In August a 5-for-1 dividend was implemented and the people who got those shares now owned 15 million shares priced at $0.002 while at the moment the ticker is sitting above $1.40.
Another thing that should be pointed out is that according to Google the official headquarters of the company look like this.
The prolonged upwards trend is impressive but there is nothing supporting it. The fluff PR alone cannot maintain the ludicrous valuation of the company. If you are contemplating making an investment be sure to do your own due diligence before you put your money on the line.
