Investors Mop Up Underpriced NanoTech Entertainment, Inc. (PINK:NTEK)

Cheap stocks have many reasons to go up, and at two cents, NanoTech Entertainment, Inc. (PINK:NTEK) is just accessible enough to easily add 30% in a day and keep its general upward direction from the past few weeks. The upward movement on Tuesday’s trading is a far cry from previous days when the price doubled from its single-cent territory. The ticker went up in volume and price significantly since December.

While NanoTech is advertising itself as an extremely promising company dealing in well-developed proprietary games and other systems, its filings reveal a still precarious position, where cash-hungry activities incur debt and stock dilution. As of September 30th, 2012, NTEK has relatively little to show:

• $668 cash

• $37,665 revenues

• $131,000 operating loss

• $1.16 million current liabilities

NTEK promises in the new year it will unveil new IPTV products which may make monthly income rise above a million dollars per month almost immediately as it secures customers. While the company runs a robust PR campaign touting contracts and developments, it shares a strange revelation in its OTC markets filings, that currently it lacks sufficient liquidity to run its normal operations. Otherwise, the NTEK website is functioning especially well in the arcade gaming secrion, yet lacks substance in other areas, which we expect may be developed in the future.

The gaming and IPTV company seems to rely on a miraculous turn of events, a not so far-fetched possibility in the world of online technologies. Yet its extremely cheap and accessible stock may be the real reason for investors’ interest more than the business outlook. NTEK has not been promoted since November last year, and then only in a short campaign with a limited budget of $2,500. The pump by TITAN Stock Alerts had a limited effect and ended in rapid selling in the next few days. The new upward trend of the graph started in December as the ticker went to double-zeroes and invited investors waiting for quick returns.

NTEK invited a former high-level executive from Sega Enterprises, Inc. (USA), Mr. Alan D. Stone. He seems to have a long experience with arcade games and other coin-operated entertainment. Yet it is still early to see if this will have a positive effect on the business of NTEK beyond its pinball and arcade division. Mr. Stone will have to deal with a market of overly-satiated consumers that may not experience the novelty of video games as in the 80’s and the 90’s.