One World Holdings Inc (OTCMKTS:OWOO) Is Feeling the Heat
Between June 16 and June 23, a period of just one week, One World Holdings Inc (OTCMKTS:OWOO) managed to run from just $0.0017 per share all the way to a peak of $0.0083. And there’s nothing wrong with that.
After all, plenty of good news came out of the company headquarters during that period. First, OWOO attracted attention to itself when the management team said that their dolls will appear on the shelves of almost 3,000 WalMart stores. Everyone was impressed with the purchase order and Robert Tonner, the CEO of Tonner Doll Company, even decided that he is going to buy a 10% stake in the small OTC enterprise. The management team said that this boosts OWOO‘s chances of being acquired by an established name in the industry in the next 18 to 24 months.
Everyone was very excited and thought that the ticker can continue to move in the right direction. Unfortunately, OWOO proved over the last few days that it might not be quite as resilient as people hoped. Three consecutive red sessions of significant volumes brought it down to yesterday’s close of $0.0043 per share.
More worryingly, this happened in the midst of a conference call which clarified some things around the WalMart deal and resulted in even more positive news. The management team announced during the said conference call, for example, that some more purchase orders are expected in the very near future, they said that the dolls will appear in various magazines, and they announced that, having established the brand in the retail world, they will try to make money by licensing its to other manufacturers which should improve the profit margins. Yet, investors seem unimpressed. And, once again, there’s nothing wrong with that.
If everything goes according to plan, OWOO‘s future might turn out to be quite exciting, but, as we’ve mentioned numerous times on these pages, penny stock investors aren’t renowned for their patience. And in terms of actual facts and figures, OWOO doesn’t have a lot to show for itself at the moment. In fact, at the end of March, the company had just $8 thousand in the bank, a humongous working capital deficit, and quarterly revenues of less than $800 which can hardly get your pulse racing.
And while the jump to over $0.008 gave retail investors plenty of food for thought as to whether OWOO really is as solid as the press releases would suggest, other people had no problems deciding whether they should buy or sell.
We’re talking, of course, about the holders of the numerous toxic notes that can be found in OWOO‘s books. During Q1, the company was forced to issue more than 80 million shares at $0.0036 apiece in order to satisfy some debt and the management team estimated on March 31, that if all the note holders decide to fill in their conversion notices, OWOO will need to print more than 2 billion new shares. This, however, was on March 31. Subsequent to that date, the company sold some more convertible notes (some of which can be turned into stock at a fixed price of $0.001 per share) and it also issued 24 million shares at an average rate of just over $0.0011 apiece in order to satisfy more debt. The decline from the last three days clearly shows that the dilution is a factor you need to consider carefully while making your investment decision.
In the meantime, you might also want to take a look at OWOO as a trading opportunity. Earlier today, the New York Daily News published a rather long article on the company and its newly established relationship with WalMart and as a result, about half an hour into the session, OWOO is sitting at $0.0046 (about 7% in the green). How long the surge will last, however, is for time to tell.
