NanoTech Entertainment, Inc. (OTCMKTS:NTEK)’s Q3 Results are Out, Ticker Seems Hesitant
NanoTech Entertainment, Inc. (OTCMKTS:NTEK) have been on the list of the most heavily traded stocks in Pennyland for months now and we reckon that they deserve it much more than other small cap ventures. Why?
Well, not least because NTEK is one of the few OTC companies that have managed to come up with a financial statement containing a net income rather than a net loss. This happened for the first time when they filed the annual report for the twelve months that ended on June 30 and although their fiscal year was not profitable, the second calendar quarter was. You can see from the chart that this was definitely a catalyst in pushing both the price and the trading volumes higher and higher. Yet, the ticker appears to be somewhat reluctant to give traders the consistency that they’re hoping for. There are multi-day surges in the right direction but, more often than not, they are followed by drops that few people like to see. Sure, the overall direction is up, but we’re still baffled by the unpredictable behavior, especially from a ticker that has so much support from its shareholders.
The erratic movement was displayed once again yesterday when NTEK published the financial results for the third quarter of 2013. Before we go into the details, here’s a summary of the most important figures:
cash: $65 thousand
current assets: $208 thousand
current liabilities: $623 thousand
quarterly revenue: $3.3 million
quarterly net income: $79 thousand
Since NTEK file their documents using the alternative reporting standards, we don’t know whether the statement was published before or after the opening bell, but, considering the $2.5 million worth of shares that changed hands throughout the day, we can assume that it came out early in the morning. So, the figures, especially the revenues, look good, traders knew about them and yet, the ticker closed the session around 1.5% below Tuesday’s value.
Sure, it’s not a huge drop, but normally, when an OTC company reports around $3.3 million in revenues, the price tends to jump instead of losing ground. In NTEK‘s case, there could be an explanation.
This is the second profitable quarter reported and this time, as an added bonus, we can see that some additional sources of revenues have given the sales a colossal boost (the previous quarter ended with around $818 thousand in revenues). Yet, the net income seems to be smaller and the balance sheet now sports a negative working capital as well as a substantial increase in the liabilities. It’s up to you to decide whether these things are normal and are part of NTEK‘s growth strategy, or whether they are the result of some setbacks. Yesterday’s small correction, however, shows that traders were hoping for something more and it further illustrates just how volatile and unpredictable the ticker is.
NTEK lost just a fraction of its value yesterday and recovering is almost certain if the wind is fair, but with Puget Technologies, Inc. (OTCBB:PUGE), things stand a little bit different. After being pumped by several paid promoters, it took a dive and wiped out nearly a third of its value. Solar Power Inc (OTCMKTS:SOPW), on the other hand, continued its ascend finishing the session at a new 52-week high.
