Nanotech Entertainment Inc (OTCMKTS:NTEK) Moves Up On Below-Average Volume
Late into yesterday’s trading the stock of Nanotech Entertainment Inc (OTCMKTS:NTEK) made a strong push upwards and closed with a gain of 14% at $0.0225. The outcome was indeed positive but investors showed little interest resulting in a daily volume of just 10 million shares when the 30-day average for the company sits at above 15 million shares.
After bouncing from the lows registered at the start of the month NTEK have been able to keep the majority of their gains but if you go further back the chart the picture becomes a lot less encouraging. Compared to its high of over 10 cents posted last September the stock is currently nearly 80% lower.
Investors should keep in mind that the current uptrend displayed by the stock is not supported by anything substantial. NTEK have been publishing PRs rather regularly but most of them, however, have been about new additions to the company’s UltraFlix catalogue and it is safe to say that the market has been far from impressed. In fact, the last PR that on May 8 announced the addition of the top 50 grossing indian movies not only failed to excite investors but on that day the ticker crashed hard wiping over 16% of its value.
If you check the financial filings of the company you might get a little perplexed – according to the latest quarterly report at the end of December 2014 NTEK had:
• $360 thousand cash
• $4.1 million total current assets
• $570 thousand total liabilities
• $2.3 million revenues
• $830 thousand net gain
So why is the stock of a company that actually has a positive bottom line, something that the majority of the pennystock ventures can only dream about unable to form a more prolonged upwards move?
The fact that NTEK have been putting their shareholders through a significant dilution of the common stock certainly has something to do with it. As of June 30, 2014, the company had 589 million outstanding shares. By the end of December that number had reached 724 million outstanding shares out of the 740 million authorized. With so little room left it appears that NTEK decided to increase their authorized amount. If you go to the Nevada Secretary of State website and search the name of the company you will see that NTEK now have 990 million authorized shares.
The next quarterly report that should be submitted tomorrow is going to reveal just how many shares have been printed recently and if the dilution is still going at the same rate the ticker might reverse its direction.
