Konared Corp (OTCBB:KRED) Plummets Below Pre-Pump Levels
Konared Corp (OTCBB:KRED) published a 10-K/A (covering the twelve months ended December 31, 2013) on March 20 and if you take a really good look through it, you’ll see some interesting facts.
Scroll down to page forty-nine, for instance, and you’ll notice that back in June 2011, thirty-one investors purchased 25,650,000 (1,900,000 pre-split) shares for as little as $38 thousand (around $0.0015 per share).
Couple this fact with the $2.3 million promotion that is running for the stock, and you have a pretty good reason to think carefully before putting any money on the line. This, by the way, is something we mentioned long before the publishing of the 10-K.
And while we’re on the subject of the pump, we should note that it is quite different than the majority of the promotional campaigns out there. Ever since the beginning, the more forward-looking investors argued that it won’t have such an effect on the stock because, unlike most of the promoted enterprises, KRED is actually an operating, revenue-generating entity.
Indeed, many of the pumped OTC stocks belong to companies that do little more than issue optimistic press releases and, indeed, KRED is an operating company. A point proven by the summary of the most important figures found in the 10-K:
- cash: $213 thousand
- current assets: $640 thousand
- current liabilities: $276 thousand
- yearly revenues: $890 thousand
- yearly net loss: $3.9 million
Revenue generating entity or not, the pump did have its effects on the ticker and they were quite devastating. The touting gave KRED an initial push and on January 28, it even hit a 52-week high of $1.36 per share. As you can see from the chart, however, it has suffered some massive corrections since then and, after another 25% drop yesterday, KRED slipped below $0.50.
That said, even at these levels, the market cap is hovering precariously close to the $40 million mark and we’re not sure that the figures found in the latest reports are substantial enough to support it. The 10-K informs us that there’s been a 51% drop in revenues year-over-year and it also shows that the net loss has grown by as much as 35%.
Although we haven’t received any emails since February, there’s still some promotional activity around KRED and the pumpers are quoting optimistic press releases, trying to convince investors that the stock can recover. Then again, they said back in January that it has the ability to reach $4 or even $8 per share. That didn’t really happen, did it?
Carefully considering all the risks and doing a lot of due diligence is, as always, absolutely crucial.
KRED wasn’t the only stock to plummet at the start of the new week. AvWorks Aviation Corp (OTCMKTS:SPLI) took a heavy blow as well and wiped out 38% of its value while registering a dollar volume of around $7 million. Hemp, Inc (OTCMKTS:HEMP) too had a pretty horrific fall. It obliterated around 14% of its market cap while shifting more than $3.2 million worth of stock.
