Global Digital Soltn (OTCMKTS:GDSI)’s Crash Can’t Be Stopped
Global Digital Soltn (OTCMKTS:GDSI) had a very good run in the three weeks before its latest financial report hit the web, but once the 10-Q was finally published, it took no time at all for the ticker to tank.
Suffice it to say that one cursory glance at the report makes this most recent crash in GDSI‘s history look entirely justified. After all, investors really don’t like hearing bold words and announcements about acquisitions, only to see mediocre numbers such as these in the latest report of the company in question:
- Cash – $115 thousand
- Current assets – $570 thousand total
- Current Liabilities – $1.4 million
- Quarterly Revenues – $254 thousand
- Quarterly Net Loss – $935 thousand
These numbers are disappointing, to be sure, especially considering how big GDSI has talked in the last few months. However, it is certainly worth noting that in this particular case fact that the company is not making ends meet is not even the biggest threat to investor value. So what is?
A quick check reveals that while GDSI has not made a lot of progress commercially, its share structure has changed dramatically over the course of these last six months:
- As of August 4, 2015 GDSI had 112 million SO
- As of September 16, 2015 GDSI had 139 million SO
- As of October 7, 2015 GDSI had 266 million SO
- As of November 4, 2015 GDSI had 489 million SO
We once warned that there was a good chance that GDSI‘s investor value is drowning in dilution. True to form – it was.
Now the numbers in the company’s reports sort of speak for themselves – and when they do, investors should really pay attention. Why?
Because there’s no indication that the printing of shares is at an end. Just a little over a month ago GDSI had over $312 thousand worth of convertible notes and $76 thousand in accrued interest. That debt converts at “a 40% discount to the lowest trading price during the previous twenty trading days before the date that the note was executed.”
Under the circumstances, is it really any wonder that the ticker is falling?
