One World Holdings Inc (OTCMKTS:OWOO) Is Sick of Being a Sub-Penny Stock
On April 15, One World Holdings Inc (OTCMKTS:OWOO) published their 2014 annual report and along with it, they also issued a press release with which they proudly announced that they have registered “a yearly revenue increase of 532%”. Indeed, once you open the 10-K, you’ll see that 2014 sales are hovering around $110 thousand while the figure for the previous year sits at just $21 thousand.
The more diligent among you, however, will spot a problem. OWOO didn’t start selling dolls until October 2013, so when the management team said that they had logged a 532% increase in revenues, they were comparing the revenue figure after twelve months of operations in 2014 to the sales after just two months in 2013. In light of this, the increase is not that dramatic.
Some of you probably aren’t too bothered about this, but in Pennyland, where investors lose money on a daily basis, it could be perceived by a lot of people as nothing more than a cheap way for the management team to cause some artificial hype around the company stock. Especially when the business isn’t exactly thriving.
A month after bragging about the year-over-year sales jump, OWOO filed the report for the first three months of 2015 and showed us that in a matter of ninety days, they sold just $739 worth of dolls.
This is not the only OWOO press release that has raised some eyebrows. As we mentioned in our previous articles, a number of convertible notes issued over the years put the stock through more than 1,000% in dilution in a matter of just over twelve months. At the end of March, the management team said that they will no longer rely on toxic debt and that the ticker will finally be given room to breathe, but during the following four weeks, OWOO issued nearly $100 thousand worth of additional notes convertible at a 50% discount, and the printing press pushed out a further 24.5 million common shares at $0.001 per share in order to satisfy some debt.
So, it’s fair to say that there are one or two red flags that might make you walk away from OWOO. Last week, however, investors forgot about them completely. The stock jumped on June 16 when it managed to more than double its value in a matter of a single session, and although it later hesitated a bit, it seems to be gathering momentum at the moment. On Monday, it added nearly 24% and after another 5% jump yesterday, it closed the session at $0.0083 per share. If it manages to keep the fire going for a bit longer, it might just be able to break out of the sub-penny levels for the first time in over eight months. Believe it or not, this might not be that far-fetched.
The initial spike from last week was caused by a distribution deal according to which OWOO‘s line of dolls should appear in nearly 3,000 Walmart stores before the end of October. The press release attracted quite a lot of attention both from investors and from the media.
CEOLive.tv (who say in their disclaimer that they occasionally receive compensation for covering public companies) conducted an interview with Trent T. Daniel, OWOO‘s Founder and even Fortune magazine were interested. They said that OWOO could be one of the players that will eventually dethrone Barbie.
The people behind Tonner Doll Company, who, by the way, have been partnering with OWOO over the years, appear to be quite impressed as well. A press release from yesterday told us that they have agreed to acquire a 10% stake in the company. For some reason, the PR didn’t appear on Yahoo! Finance and the rest of the major news websites, but OWOO announced today that it should be available before the opening bell.
All in all, the good news just keeps on coming and if it is to be believed, OWOO might be in for some interesting months from now on. But will this be enough to offset the dreadful toxic debt and the potential dilution that could stem from it? This is for time to tell.
