Changing Technologies Inc (OTCBB:CHGT) Takes a Step Back on Record Volume

After making a more pronounced jump up the chart on Thursday the stock of Changing Technologies Inc (OTCMKTS:CHGT) suffered a minor correction on the very next day. It slid down by less than 4% and closed the week at $1.31 per share. Despite the outcome for most of the session the ticker was actually sitting quite higher reaching an intraday high of $1.50. It began dropping down less than an hour before the closing bell. Interest in the stock reached record levels with nearly 366 thousand traded shares.

Despite the occasional tumbles CHGT have been displaying an impressive recovery for the past couple of weeks. The problem is that the prolonged climbing trend has not been supported by anything other than fluff PRs.

The company has been publishing massive amounts of PRs, over 30 just for the past three months, but they have contained almost no useful information and instead have talked about the 3d printing industry in general. Today they came out with yet another PR this time about Hewlett-Packard spinning off a 3D printing company. What that has to do with CHGT is anybody’s guess.

The fundamentals of the company are not that inspiring either. In fact they are quite troubling. According to the annual report covering the fiscal year ending June 30 Changing Technologies have:

• $26 thousand cash and total assets!
• $54 thousand total liabilities
• ZERO revenues
• $65 thousand net loss

The next financial report should be filed in the next two weeks but it is doubtful that it will show a better picture – CHGT’s 3D on demand retail portal is still in development.

Investors should also take into consideration the fact that a year ago the company sold 3 million shares for just $30 thousand. In August, this year, a 5-for-1 dividend was approved and the people who bought those shares now owned 15 million. If they decide to sell them at the current prices the effect on the ticker could be devastating.

Even if you believe in the potential of the 3d printing industry the red flags around CHGT demand the use of caution. The company’s market cap of more than $78 million is grossly inflated and a more severe correction is not out of the question. In early trading today the stock is fluctuating around the $1.30 mark.