Union Equity Inc (OTCMKTS:UNQT) Springs Back to Life
From leasing trucks and heavy equipment, to selling cosmetic products, to real estate. Union Equity (OTCMKTS:UNQT) have tried their hands at a fair few business plans in their time, but the three-year chart shows that they failed rather catastrophically with all of them.
A couple of months ago, the stock was firmly anchored to the bottom, volumes were non-existent and there weren’t even any official filings that could draw investors’ attention. Then, in December, Joseph Thornburg took the helm and announced that he wants to resurrect UNQT.
Several updates have hit the wire since then and in them, Mr Thornburg states that he is working frantically on bringing the company current with its filings and getting the operations going. Nothing is official as of yet, but investors seem to be paying attention now. Over the last two months we’ve seen some active sessions and yesterday, UNQT managed to jump up by as much as 166%, finishing the day at $0.0008 per share.
When the closing bell rang, the dollar volume stood at over $913 thousand which is quite a lot for a triple-zero stock that was all but dormant until a couple of days ago. It also seems like a bit of a stretch for a company that has $20 thousand in current assets and no working website.
Clearly, there’s no shortage of things to suggest that UNQT doesn’t really deserves its market cap which, according to the OTC Markets, stands at over $4.1 million. That, in turn, raises a couple of questions: “Why did investors jump in?“, “Was it because of the numerous updates, or is there something else at play?“.
According to our database, there have been no promotions for the stock since 2012, but if you dig around the message boards and social networks, you’ll see that an entity called Silk Dynasty Stocks LLC is touting the ticker mainly through Facebook and Twitter. What’s more, the people behind Silk Dynasty have apparently heard rumors about UNQT‘s potential entrance into the marijuana business and, as you can see, this seems to be a good enough reason for some people to jump in.
Excitement is strong, but you mustn’t forget that if the speculations turn out to be wrong, UNQT will be just another OTC flash in the pan. It should also be noted, however, that a potential cannabis-related PR could send the stock even higher. Whatever happens, there are a few risks well worth considering.
The pot industry, as you probably know, is fiercely competitive and the latest financial statement shows us that if UNQT decide to jump in, they will be entering the fight with a huge handicap. As of right now, there are no announced funding agreements and on the whole, an entrance into the overcrowded cannabis market could present itself as a big gamble.
At the same time, the uncertainty around the future might prompt some of the UNQT shareholders to exit their positions while the price is still high. Who are those shareholders?
Note 7 of the latest report (Common Stock Transactions) tells us that back in 2012, millions of shares got printed as a conversion of debt at a rate of $0.00001 per share. Also in 2012, a few entities (including Fairhills Capital who had some problems with the SEC) bought nearly 2.7 billion unrestricted shares for just $385 thousand.
Will they hold on to their discounted stock? Only time will tell.
