Global Equity International Inc (OTCBB:GEQU) Wipes A Quarter Of Its Value

In our previous articles we warned you that the stock of Global Equity International Inc (OTCBB:GEQU) had reached some rather unstable price ranges. And while the ticker registered a couple of shaky sessions it was still able to maintain its price. Yesterday, however, it failed to do so.

GEQU opened at $0.0435 but by the time of the closing bell they were sitting at $0.0335 for a loss of over 25%. The sever crash took place on an above-average volume of 9.7 million shares. Despite obliterating such a huge chunk of its value GEQU still commands a market cap of more than $25.8 million, valuation that is completely disconnected from the last reported financials of the company. The quarterly report for the period ended June 30 showed that back then GEQU had:

• $734 cash
• $52,490 current assets
• $3,899,798 current liabilities
• $1,140,500 revenue
• $372,802 net income

Unfortunately the fact that the company finished the quarter with a positive bottom line is not enough to offset the rest of the numbers on the balance sheet. Especially when you take into account that the sole reason for the over $1.1 million in revenues was a $865 thousand payment that was received in stock in the private company Duo World Inc.

The shareholders of the company have also been plagued by a rampant dilution of the common stock. At the start of the year GEQU had just 36.3 million outstanding shares. During the 6 months ended June 30 118.3 million shares got issued as a conversion of debt at severely discounted prices while another 250 million were issued to the CEO and CFO of the company as a reduction of debt owed to them. In July and August another 75 million shares saw the light of day at triple-zero prices as more notes were exercised. This brought the O/S count to 482.3 million as of August 12.

That however was not the end of the dilution. On August 25 GEQU increased their authorized shares to 950 million common shares and just two days later some insiders of the company received enough shares that the O/S had now reached 752.3 million.

GEQU have stated that they have managed to eliminate all of their toxic debt but the tremendous amount of discounted shares that has been already issued could devastate the share price if they get unleashed on the open market. A couple of agreements were announced recently but will that manage to stop the stock from sliding down to its previous price ranges? It is up to you to decide.