Petron Energy II (OTCMKTS:PEII) Draws Investors’ Attention Once Again
As you can see from the chart on the right, Petron Energy II (OTCMKTS:PEII)’s performance over the last couple of months hasn’t been perfect. In fact, the ticker has been behaving rather erratically since the very beginning.
Active trading for the stock started back in June 2013 and at first, things were looking good. PEII registered a respectable climb and hit a 52-week high of $0.125 per share on July 26. Unfortunately, it soon caved in under the pressure and embarked on a rather prolonged slide towards the bottom of the charts which culminated in the all-time low of $0.0013 per share logged on January 29. That’s a pretty appalling performance, but what’s the reason for it?
PEII became the target of several paid pumps back in 2013 and they didn’t really help. We received around thirty email alerts between July and October and if you have a look through our previous articles, you’ll see that the effects of all the touting have been less than impressive.
The pumpers were pretty optimistic about the company and its future, but, having gone through the latest 10-Q, we can see that their enthusiasm might have been somewhat misplaced. Here’s a summary of the most important figures as of September 30:
- cash: $8,600
- current assets: $57 thousand
- current liabilities: $2.8 million
- quarterly revenue: $76 thousand
- quarterly net loss: $468 thousand
In one crucial aspect, PEII is quite different from the majority of OTC-listed oil and gas companies. They are actually generating revenues. As you can see, however, the sales figures are not really awe-inspiring and issues like the $2.7 million working capital deficit and the substantial net loss could potentially put a rather big spanner in the works.
That, however, isn’t the biggest problem. The elephant in PEII‘s room is called dilution. Compare the Q3 report with its predecessor and you’ll see that in a matter of just three months, the company issued more than 144 million shares. Unfortunately, this was just the beginning.
A recent S-1 filing tells us that the O/S count as of January 9 was hovering around 700 million. That, by itself, is quite a severe dilution, but it hasn’t stopped there. Peculiarly, PEII don’t seem too ashamed about it and on their website (which is, apparently, updated far more often than the company profile at OTC Markets) they publish the number of issued and outstanding shares on a regular basis. According to it, on March 18, the O/S count amounted to exactly 1,391,220,381. Two weeks ago, PEII announced in an 8-K form that they are increasing their authorized capital to 15 billion shares which could suggest that the stock issuance is far from over.
The facts above could put off many investors and yet, PEII managed to register a rather interesting session yesterday. Nearly $600 thousand worth of shares changed hands while the price increased by as much as 53%. The ticker is currently standing at $0.0023 per share which, if the company website is to be believed, results in a market cap of around $3.2 million. The excitement seems to be caused by the recent series of press releases that came out of the company headquarters. The latest announcement tells us that work on one of PEII‘s wells in Texas should begin within the next couple of weeks.
Quite a lot of promises have been made and things do indeed look positive. Is this alone enough to support the ticker? And is it enough to battle the catastrophic dilution? We’ll let you decide.
PEII wasn’t the only strong performer during yesterday’s session. HyperSolar Inc (OTCMKTS:HYSR) had an interesting day as well. It managed to register a dollar volume of $761 thousand while jumping up by nearly 19%. MyEcheck Inc (OTCMKTS:MYEC)’s behavior was even more impressive. It added a healthy 40% while shifting around $1.27 million worth of stock.
