The $3.8 Million Pump for Media Analytics Corp (OTCBB:MEDA) Crashes
Yesterday was a disaster for the shareholders of Media Analytics Corp. (OTCBB:MEDA). Their stock was flattened to the ground slashing more than half of its value in just one day dropping from $1.67 per share to just $0.74. The crash may have taken by surprise even experienced traders because pumps supported by such colossal sums of money usually manage to create a prolonged uptrend for the promoted stock.
But MEDA is not capable of keeping up with the artificial hype boosted further by the email alerts that have been sent out. In their landing page created by the entity Stock Report Baron the company is described as a “social media juggernaut” and has been assigned a shot-term price target of $5.88 which is supposed to increase to $8.22 per share after a year. We don’t know how these prices were calculated when MEDA has just switched to the social media analytics industry.
Their main operation will be the sales of Klarity Analytics Dashboard for which they have entered into a licensing agreement with Social Media Broadcasts Limited, that coincidentally is another company managed by MEDA‘s new CEO Mr. Stephen Wong. So according to the terms between the companies MEDA has to pay a one-time fee of $300 thousand, annual fee of $120 thousand and 30% royalty on every sale.
We are curious where such funds will come from when the previous business left MEDA with:
• $2476 cash and total assets
• $10 142 total liabilities
• ZERO revenues
• $2500 net loss
• $10 142 total liabilities
• ZERO revenues
• $2500 net loss
Not to mention that thanks to the increased attention towards the company its insiders stood to gain millions. Seed shareholders bought 1,2 million shares for just $0.01 back in 2011. After the 20-for-1 forward split effected this February that number was bumped up to 24 million shares which even at the current prices could sell for $17.7 million.
MEDA is still grossly overvalued with a market cap of $76 million so further corrections are more than likely. It is best to stay clear from this stock unless you are prepared for the eventual losses. The $3 million pump for Alkaline Water Co., Inc. (OTCBB:WTER) already suffered a massive crash and is now trying to recover rising by 20% and closing at $0.6. The stock of Virtual Piggy, Inc. (OTCBB:VPIG) also bombed by losing 43% yesterday and dropped well below the $1 closing at $0.85.
