Icon Media Holdings, Inc. (OTCMKTS:ICNM) Steamrolled on Huge Volume
After shooting up spectacularly on Tuesday, yesterday Icon Media Holdings, Inc. (OTCMKTS:ICNM) came thundering down in one of the most spectacular chart fiascos in recent months. The company’s share price suffered a devastating 70% drop despite a news release that announced its vague plans to expand into medical marijuana.
The company originally shot up by 150% on news that it was ranked as Pink Current Info. ICNM was Pink No Info until mid-April and got its upgrade from Limited to Current Info just before the surge. We looked at the company’s financials and share structure in a previous article but now ICNM has published its new quarterly report that sheds new light on things. Here is the brief number rundown:
- $3.9 thousand in cash
- $1.2 million in current liabilities
- $290 thousand in quarterly revenues
- $83 thousand in quarterly net loss
The filing is another fine example of messy pink sheet reporting, with cash as of March 31 reported further down the filing to be $32 thousand. The $290 thousand in revenue is also misreported as ‘for the year ended March 31’ below the consolidated balance sheet section, even though the report is a quarterly.
The new filing at least explains where 250 million of the shares issued in 2014 went. A certain Ribe Usta LLC (sic) is now listed as a beneficial shareholder, with 250 million shared held, representing 49.8% ownership of ICNM. This amount accounts for the better part of the 300% dilution ICNM suffered over the first four months of 2014.
With ICNM generating as much net loss in a single quarter as it did over all of 2013, it was obviously time for change. This came in the form of one of the most vague and nondescript press releases we’ve seen in recent months. Immediately before dropping like a brick yesterday, ICNM announced ‘its new online direction’ (whatever that may mean) into the marijuana sector. According to newly appointed COO Mr. Brown, a broadcast engineer, ICNM‘s ‘unique entry’ into the pot sector will help the company achieve ‘greater operating efficiencies’ and other assorted nondescript phrases that give little specific info about the company’s plans.
Sadly, the ‘switch to cannabis’ card has been played to death by now and one of the companies who tried that move was even suspended by the SEC a couple of weeks ago. Cannabusiness Group, Inc. (OTCMKTS:CBGI), formerly known as Muscle Warfare International, Inc., announced a switch to cannabis in mid-February, soared out of double-zero land and was eventually suspended by the SEC on May 7. With that in mind, it’s no wonder traders have grown less fond of jumping on each ticker that bursts out of nowhere after barely trading for months and announces its switch to cannabis.
Additionally, at least one stock-focused Twitter user going by the handle ‘Big Money Mike’ who has a large number of followers highlighted ICNM, acting more or less like a free pump, and that may have triggered additional artificial interest in the company. Now the majority of people who chose to trust a stranger on Twitter are licking their wounds, flinging mud at the said Twitter user and comforting each other on Internet discussion boards.
Learning from experience is rarely a pleasant thing, especially when the lesson comes at the cost of losing 70% to 80% of your investment but such lessons usually stick with eager traders for a lifetime. After a brief attempt at recovery, ICNM is currently 4.7% down in early trading.
