Max Sound Corp (OTCBB:MAXD) Cools Down
For four sessions in a row the stock of Max Sound Corp (OTCBB:MAXD) surged up the chart registering double digit gains each day. As a whole the share price of the ticker increased from an opening at $0.025 last Monday to a close at $0.0459 on Thursday. During the last session for the week, however, the company failed to sustain its upwards course, fell down and corrected by 9.35% for a close at $0.416. Is this a signal that MAXD will wipe more of its recent gains?
Investors should realize that MAXD is an extremely risky choice. Although they are reporting over $17.3 million in intangible assets the financial state of the company is abysmal. MAXD finished the second quarter of the year with:
• $6,125 cash
• $89,655 current assets
• $6,085,238 current liabilities
• ZERO revenues
• $2,831,325 net loss
The sole reason for the excitement shown by investors are the patent infringement lawsuits that MAXD filed against Alphabet Inc f/k/a Google Inc (NASDAQ:GOOG) and YouTube. On September 17 Max Sound were able to pay the necessary fees for the German trial to proceed. The final hearing in the patent case will take place on December 8 while a court decision is expected a few weeks after that. In the US the judge set the entire schedule of the case and the date for trial in November 2016.
So, in around two months the outcome of the first trial should be announced. In the days leading up to the court decision more and more investors might decide to jump into the stock expecting a favorable ruling. Thanks to the increased trading activity and volatility of the stock there are some people that could be able to reap millions upon millions in gains.
We are talking about the owners of MAXD‘s outstanding convertible notes. In our previous articles we already warned you that at the end of June the company had $3.16 million in convertible debt balance plus another $425 thousand worth of notes that issued between July 2 and August 7. These notes can be turned into common shares at discounts starting from 25% and going as far as $40%.
If MAXD win even one of their lawsuits or if they get a favorable settlement it could propel their stock upwards. The risks are significant though and the possibility of millions of underpriced shares to be dumped on the open market should be taken into account. It is paramount to do your own due diligence before committing to any trades involving the stock.
