TheDirectory.com, Inc. (OTCMKTS:SEEK) Spikes After Launching Ad Campaign
For quite a while the management team of TheDirectory.com, Inc. (OTCMKTS:SEEK) has been talking about a national television ad campaign that is going to involve some of the biggest TV channels – CNBC, CNN, Fox, ESPN, Bravo, AMC. The campaign was supposed to launch at the start of the month but then got postponed to June 23. This time the deadline was met and yesterday in an official PR the company announced that the start of the branding campaign.
Initially investors were encouraged by the news and at the start of yesterday’s trading the stock soared up the chart reaching a high of the day of $0.0036. Unfortunately the positive sentiment started to quickly subside and SEEK slid back down and closed the session at $0.0031. Due to the increased attention the traded volume for the day nearly tripled the 32 million shares from Friday.
In the past few months SEEK has been trying to boost investors’ confidence in their stock. They not only managed to get current with their financial reports but also became a SEC reporting company. Revenues for the quarter ending February 28 also improved dramatically and SEEK finished the period with a positive bottom line:
- $46 thousand cash
- $473 thousand total current assets
- $2.4 million total current liabilities
- $801 thousand revenues
- $212 thousand net income
Still, the limited cash reserves and the massive working capital deficit are as disturbing as ever. Also, it should be noted that $427 thousand of the current assets actually consist of accounts receivable.
The red lags around the company run far deeper than their financials though. SEEK has been putting its shareholders through some serious dilution issuing hundreds of millions of extremely cheap shares. In October, 2013 140 million shares priced at just $0.00047 were issued as conversion of debt. In December, 2013 187 million shares were issued at $0.0011, nearly three times lower than the current market valuation. In February, 2014 another 125 million shares saw the light of day at a conversion price of $0.0016, close to 50% lower that the market price at the moment.
As of April 14 SEEK had 3.8 billion outstanding shares but with the recently increased authorized amount of 6 billion shares there is quite a lot of room for further dilution of the common stock.
The national campaign may indeed create more exposure for the company but that won’t change the fact that SEEK is an extremely risky choice. Any investment in them must be preceded by doing your own due diligence. Yesterday NanoTech Entertainmet, Inc. (OTCMKTS:NTEK) wiped a significant portion of the gains they made on Friday. The stock crashed by more than 12% and dropped down to $0.067. On the other hand, the stock of Tranzbyte Corp. (OTCMKTS:ERBB) surged by 15% and reached $0.028 thanks to another fluff PR issued by the company.
