OSL Holdings Inc (OTCMKTS:OSLH) Surges Up The Chart
At the end of Friday’s trading the stock of OSL Holdings Inc (OTCMKTS:OSLH) was sitting below a penny at $0.009 with less than 5 million shares changing hands throughout the whole session. When the market opened after the weekend it seemed that the stock will remain at the same price levels trading a bit higher but still below $0.01 for most of the session. In the afternoon however the volume began picking up speed and the buying pressure pushed the stock upwards. When the closing bell rang OSLH had gained exactly 50% at $0.0135. The outcome of the trading day was indeed impressive but what was the reason for the sudden resurgence?
Well, apparently Ms. Cheryl Shuman has been building up hype around OSLH on Twitter. More importantly according to her posts a “Big Reveal” will take place on May 11. Accordingly investors seem to be returning to the stock in anticipation. At the start of April OSL Holdings announced their intent to enter into a Joint Venture and licensing agreement with Ms. Shuman. It cannot be denied that Ms. Shuman generates a lot of media attention – she has been invited as a guest on numerous TV shows while at the start of the year the New York Times Sunday magazine dedicated a whole article on her. Before you get overly excited however you might want to take into account that according to some people there is another side to Ms. Shuman’s story and it is far from positive.
Whatever the case may be OSLH is most likely going to see increased trading in the days leading up to May 11 but will this big announcement be enough to offset the myriad of red flags that currently surround the company? The financial report for the quarter ending February 28 showed that a little over two months ago OSLH were in a dire financial state with:
• $118 thousand cash
• $1 million total current assets
• $7.6 million total current liabilities
• $1.2 million revenues
• $3.1 million net loss
The situation gets even worse when you add the crushing dilution of the common stock. Just for the period between January 13 and April 10 OSLH issued a total of 236 million new shares. 176 million out of them came into existence at a conversion price of $0.00085. Let’s just say that the 52-week low of the stock is actually much higher at $0.001. The issuance of more discounted shares may not be coming to end soon because the company decided to drastically increase its authorized shares from 649 million to nearly 1.95 BILLION.
It should be obvious that any trades involving the stock of the company should be preceded by extensive due diligence. Even if the hype around the upcoming announcement pushes the ticker to a higher price range the possibility of millions of underpriced shares flooding the open market could depress it back down.
