Infrastructure Developments Corp (PINK:IDVC) Failed to Impress Investors Yesterday
The last of Penny Stock G’s emails on Infrastructure Developments Corp (PINK:IDVC) was received on March 19. Having in mind the huge 150% gains from that particular trading session, we were quite eager to know what the performance has been yesterday. Sure enough, we checked and we can safely say that it was a bit disappointing. While volume was still high, the ticker’s behavior was quite different from the one on March 19 and the price dropped by a not inconsiderate 19%. What’s more right now, a few hours into today’s trading session, they are a further 15% down and the number of shares traded is shaping up to be considerable once again.
Although, we’re a bit disappointed with IDVC, we can’t say that it came as much of a surprise to us when we saw the drop. We did the research on them yesterday and we weren’t impressed with what we managed to find, so it’s fair to say that the decrease was to be expected.
We saw that they have generated no revenue during the last reported quarter (the third one of 2012) and when we compared the figures to the ones from previous years we found that back then, things were looking much more acceptable. That said, they were still working at a loss which means that IDVC are now looking for new ways to generate revenue and finally become a profitable company.
To do that, they recently announced that they are in the process of acquiring a new venture that deals with the production of compressed natural gas, and while this could turn into a profitable business, there can be no guarantees. There is another problem with that as well. Since they have only around $8 thousand in the bank and they have generated no revenue for the third quarter of 2012, they don’t really have the cash to pay for the shares of the new subsidiary. This means that they will need to issue quite a lot of IDVC stock in order to complete the acquisition. This, in turn will make the shareholders mightily unhappy since the dilution threatens to crush their investments completely. What’s even more depressing is the fact that IDVC‘s stockholders are probably used to this sort of treatment since during the twelve months prior to the latest financial statement a total of 266 million new shares saw the light of day. This could be the reason for the constant decline in the price during the last couple of years. If this trend continues and they don’t start making money any time soon, the price could drop even further. The shareholders will get even more agitated as well.
All in all, IDVC‘s President, Mr. Eric Montandon and his colleagues will have their work cut out for them, and as we mentioned yesterday, they are all quite busy people. Mr. Montandon, for example is involved with other publicly traded companies. That’s not that much of a problem normally, but a quick research on him reveals that investments forums on the Internet are full of allegations against him for boiler room scams and other fraudulent activities. Of course, we’re not saying that you should believe everything you read on the Internet, but it’s worth keeping it in mind and do a thorough research before making your decision.
While you are performing the due diligence, you might also want to take a look through the performance of promoted penny stock companies. We did that, and we had a look through the track record of the promoter carried out IDVC‘s campaign – Penny Stock G. This wasn’t their first pump and, we reckon, it won’t be their last. When you look at the stocks that have been touted by them, however, you will not be impressed. Their newsletter, among many others tried to convince us that Cereplast Inc (PINK:CERP) is a great investment option. When we read all these claims, we checked CERP‘s financial situation out and we found out that Penny Stock G and the other promoters didn’t really have reasons to be all that excited. Sure enough, as soon as the emails stopped, CERP‘s price took a tumble and we’re struggling to see how they will manage to recover.
