TheDirectory.com, Inc (OTCMKTS:SEEK) Reverses the Upward Trend
After an impressive three-day rally during which TheDirectory.com, Inc (OTCMKTS:SEEK) managed to climb by as much as 146%, the ticker stopped and dropped by around 13% yesterday finishing the session at $0.0032. Quite a lot of questions torment the brains of investors at the moment: Did traders suddenly lose interest? Was there some profit taking? Is there something else at play? Or did someone unleash a massive stake on the open market?
Answers to these questions will be mostly based on guesswork, but one thing is for sure – while not as dramatic as the ones seen on Tuesday and Wednesday, the trading volume (203 million shares) wasn’t insignificant. It’s pretty clear that there are still quite a lot of people keeping a close eye on the ticker and the intense activity around investor message boards and on the social media certainly suggests that traders have not simply decided to move on to the next sub-penny play. What’s more, quite a lot of investors seem terribly optimistic about the future and with today’s press release (it came out around 5AM EDT) announcing SEEK‘s participation in a couple of exhibitions in 2014, we might just see another move in the right direction.
Despite yesterday’s drop, some of the more supportive people around the forums and social networks still seem optimistic and claim that the correction was caused by nothing more than some of the more inexperienced investors’ attempts to get out due to fear of a loss of momentum. Considering the remarkable performance from the start of the week, we can definitely say that this is a possibility. Penny stocks rarely perform multi-day uninterrupted runs in the right direction and taking the profit while you still can seems sensible for a lot of the people who are not entirely convinced that SEEK is such a great long-term investment.
The reason for their hesitation can only be one – the lack of any current financial information. Over the last couple of days we have talked extensively about SEEK‘s inability to provide shareholders and potential investors with an up-to-date balance sheet and we reckon that this is the company’s Achilles’ heel at the moment. They did manage to put out two statements that together cover the period between November 30, 2012 and May 31, 2013 and the highlight is, without a doubt, the positive bottom line.
Press releases since then have assured us that SEEK‘s management team, along with some financial experts are working on preparing the SEC filings that will take the ticker out of the Pink Tier, but we mentioned already that many deadlines have been set and none of them has been met so far. The last time they talked about the upcoming financial reports, they said that they are going to put them out on November 4 and we certainly hope that they will manage to do it. Bear in mind, however, that SEEK‘s CEO, Mr. Scott Gallagher, has something of a history with periodic SEC filings.
As we mentioned yesterday, he was once at the helm of another small cap venture: FTS Group, Inc. (OTCMKTS:FLIP). He was having difficulties keeping up with the company’s reporting duties there as well and at one point, the regulators stepped in. First, the OTC Markets put a Caveat Emptor sign on the company’s profile and a couple of months ago, the SEC decided that it’s high time to suspend the stock altogether. While we were digging around FLIP, we managed to find another spicy detail from Mr. Gallagher’s past.
If you have had a look at SEEK‘s filings (however outdated they are) you know that the company has gone through a couple of name changes in the past. Back in 2008 it was called US Biodefense and it was looking for an enterprise to acquire and start developing. They liked the idea of Elysium Internet, Inc (the owner of SEEK‘s main asset at the moment – the TheDirectory.com website) and decided to purchase it for an aggregate price of $2 million. Can you guess who owned Elysium before SEEK acquired it? That’s right – FTS Group, Inc, traded under the ticker symbol FLIP. Proof can be found in the asset purchase agreement which is signed by Mr. Gallagher on behalf of both the purchaser and the seller.
Of course, the facts above don’t necessarily mean that SEEK is about to follow in FLIP‘s footsteps. They can’t even set the course for the short term stock performance, but we still reckon that keeping them in mind is, as always, a good call.
Other companies that experienced some heavy trading yesterday are MediSwipe, Inc. (OTCMKTS:MWIP) who finally managed to break the fall and registered their first green session in a while and Vertical Computer Systems Inc. (OTCMKTS:VCSY) who gained nearly 30% because of some patent-related news.
