PositiveID Corp (OTCMKTS:PSID) Surges on Near-Record Volume
The stock of PositveID Corp (OTCMKTS:PSID) opened yesterday’s session with a sizable gap up at $0.023.The stock continue to climb higher in the early trading hitting an intraday high of $0.03 per share. Although such prices couldn’t be maintained and the ticker took a step back it still finished the session at $0.0265 for a massive gain of more than 26%. The number of shares that changed hands during the session was equally as impressive – the daily volume of 31.5 million was 13 times higher than the monthly average volume of 2.7 million shares.
The performance was nothing short of impressive but it may not be for the best to get overly-excited. The sudden change in investors’ sentiment doesn’t seem to have been caused by a new update about PSID’s operations. Instead, an hour before the end of Tuesday’s session the entity The Wealthy Biotech Trader published a new PR and one of the featured companies was PSID.
We urge you to take a look at the disclaimer found at the bottom of the PR for yourselves because it contains some rather important information. For example it states that the parent company of the Wealthy Biotech Trader has been compensated and may continue to be compensated $25 thousand per month paid directly by PSID. But that is not all, PositiveID also issued them a $62,500 convertible note.
The fact that PSID are continuing to issue more convertible debt is especially concerning. Long-term shareholders of the company have already been hit hard by the ongoing dilution of the common stock. Just for last year the outstanding shares grew from 45.5 million to over 169 million. As of May 14, 2015, PSID reported 262 million outstanding shares while according to their OTCMarkets profile as of June 5 they had 270 million outstanding shares. With $1.4 million convertible debt as of March 31 and the recently increased authorized shares of 1.97 BILLION the dilution might not be stopping any time soon.
PSID is without a doubt a risky stock. The paid PRs, the fact that the stock is often targeted by paid pumps, and the millions of shares issued through conversion of debt should all be taken into account before you put any money on the line. Not to mention that PSID’s financial state fails to inspire much confidence with the latest quarterly report revealing a $9.1 million working capital deficit, $136 million accumulated deficit, and a $3.8 million quarterly net loss.
