Propanc Health Group Corp. (OTCMKTS:PPCH) Green Reversal Short-Lived

On Thursday the stock of Propanc Health Group Corp. (OTCMKTS:PPCH) made a big push for recovery. The price had taken a considerable hit, slipping almost 60% from its newfound highs. Thursday marked a bounce of nearly 23%. However, the week ended with a bit of a fizzle, with PPCH closing red once again.

The price lost some 8% and PPCH stopped at $0.039 by the closing bell on Friday. Overly enthusiastic chart lovers have been predicting a major bounce after the price stopped sliding at the 200-day moving average. As with most OTC penny stocks, we believe technical analysis is for the most part irrelevant. It seems the company’s share and debt structure are also irrelevant for some. PPCH climbed the way it did in early April on news that it will be featured in the NY Times Sunday Magazine.

The company’s reports contain a lot that could serve as red flags for more cautious investors. For one, there’s the monstrous dilution. In October 2014 PPCH had 82 million common shares issued and outstanding. By February 2015 this number was up some 130%, to 191 million outstanding shares. We’ve seen worse on the pink sheets but anything over 100% within just over a quarter is a commendable feat. This percentage is especially humorous in light of PPCH claims of ‘minimizing dilution’.

The ride is still not over, sadly. The latest filing from the company is an 8-K detailing a whole slew of newly signed convertible debt. The 100-plus page document contains a lot of information that will be of interest to investors and even the short version of it is too long to summarize here, as the number of separate convertibles is huge. The notes have been signed between January and March 2015 and come with delicious fixed percentile discounts from market prices.