Epazz Inc (OTCMKTS:EPAZ) Hesitant Under Heavy Volume
As you can see from the chart on the right, Epazz Inc (OTCMKTS:EPAZ)’s performance over the last couple of months hasn’t been the definition of consistent. There’s no shortage of mighty jumps, but in most cases, they are followed by scary corrections. Having said that, we should note that this sort of behavior is not that uncommon for a triple zero penny stock. What is unusual, however, is the volume which, over the last couple of weeks in particular, has been rather impressive.
Yesterday, for example, EPAZ managed to shift more than $750 thousand worth of stock. The ticker opened the session with a gap up at $0.0007, ran to an intraday high of $0.0011, but failed to sustain the pressure. It closed the day at $0.0005 which is around 28% below Wednesday’s close. Clearly, there’s lots of people putting their money on the line, but what is all the commotion about?
EPAZ went through a small promotional campaign last month. When we say “small“, we mean it. Only Penny Stock Prophecy and Gold Medal Penny Stocks took part in the pump and they received a grand total of $700 for their efforts. Nevertheless, they did manage to lure in some traders and, with the help of a few optimistic press releases, EPAZ made it onto the list of the most heavily traded tickers in Pennyland. The question is: “Will it manage to perform under pressure?“.
We’re about to find out, but now is probably the right moment to mention that EPAZ isn’t really the typical triple-zero company.
They have been around for quite some time, they have several operating subsidiaries, and they are generating revenues. The latest 10-Q covers the period ended September 30, 2013 and it sports the following figures:
- cash: $43 thousand
- current assets: $127 thousand
- current liabilities: $1 million
- quarterly revenues: $156 thousand
- quarterly net loss: $585 thousand
The fact that EPAZ is an operating, revenue generating entity, coupled with the affordable price, could lure in some investors. What’s more, the press releases coming out of the company HQ sound mightily exciting.
Yesterday, for example, they announced that they’re in the middle of negotiating the acquisition of an unnamed help desk software company which should add around 15% to the recurring revenue stream. The PR articles from a couple of weeks ago sound just as promising. Before you get too excited, however, you should probably consider one more thing – dilution.
Between December 2012 and November 2013, EPAZ issued nearly 2.3 billion shares. A major part of them saw the light of day as a conversion of debt and there’s still plenty of notes waiting to be turned into common stock at some tasty discounts.
The more forward-looking investors will probably argue that (as the press releases would have you believe) the revenues should increase which could give EPAZ a better chance of surviving the dilution and they might just turn out to be right. Then again, the latest 10-Q shows that the quarterly revenues have decreased by as much as 49% year-over-year which isn’t a good sign.
All in all, the fact that EPAZ is having problems getting out of the triple-zero levels shows that the severe dilution is crippling the stock. Only time will tell if this is about to change.
SUTIMCo International Inc (OTCMKTS:SUTI) is another sub-penny ticker that failed to impress during yesterday’s session. After making a mind-bending surge on Wednesday, it stumbled and wiped out more than half of its value while shifting around $1.7 million worth of shares. MediJane Hldgs (OTCMKTS:MJMD)’s day, on the other hand, was quite impressive. It logged a similar dollar volume, but its price increased by no less than 36%.
