Global Digital Solutions, Inc. (OTCMKTS:GDSI)’s Crash Has Started
A couple of days ago we warned that Global Digital Solutions, Inc. (OTCMKTS:GDSI)’s amazing run up wouldn’t last, and lo and behold – it didn’t.
The company lost 21.28% of its market cap on Friday, and it looks like it may go even farther down the charts this week. Why?
Because the reason it jumped up in the first place can’t support its elevated position. The news that it has made an acquisition caused a lot of hype, but until GDSI actually files a report describing what the acquisition actually brought in in terms of assets, liabilities and opportunities it will be unclear if it was actually worth the excitement.
Meanwhile, the company’s financials for Q1 and Q2 2015 are far from peachy:
- Cash and cash equivalents – $147 thousand
- Total current assets – $769 thousand
- Total current liabilities – $1.5 million
- Total liabilities – $2.1 million
- Revenue – $379 thousand
- Net loss – $2 million
Still, the week financial sheets aren’t even the biggest threat to investor value currently. No, according to the company’s filings toxic dilution is. Why? Well, let’s see some statistics:
- 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
The fact that last Wednesday saw 235 million shares of GDSI common stock change hands in a single session suggests that this number is far from current as well.
The worst part is that all these new shares were printed at severe discounts. 40% from the lowest price over the last 20 days prior to conversion seems to be the norm with GDSI‘s discounts, which means that noteholders can currently get their hands on its stock as cheap as $0.0008 per share.
What more needs to be said on the matter? Let the buyer beware.
