VGTel Inc (OTCMKTS:VGTL) Is Back in Sub-Penny Land

At the end of June VGTel Inc (OTCMKTS:VGTL) announced that they will not be able to file their annual report for the period ended March 31 on time. How did investors react to the news?

They couldn’t care less. The volumes were pretty much non-existent before the notification of late filing and they continued to be quite dismal after it. We have yet to see the aforementioned report, but another announcement from a few days later changed the market sentiment towards VGTL. On July 9, the company filed an 8-K form which said that TV personality and famous entrepreneur, Amilya Antonetti, has taken the helm. Helping her would be K Bryce Toussaint whose resume is just as impressive.

In typical VGTL fashion, the stock’s reaction was a bit slow at first, but eventually, investors started paying more attention. The peak was especially strong a couple of weeks ago when the ticker smashed its way out of the sub-penny levels and ran to more than $0.02. It even briefly played with the $0.03 barrier, but unfortunately, it lost momentum last week and it crashed rather hard.

In fact, just three red sessions brought it down from more than $0.02 all the way to less than a penny. About fifteen minutes after the start of the new week, it’s sitting at $0.0095 or another 2% down.

The people who have invested their hard earned cash in VGTL because of Ms. Antonetti and Mr. Toussaint’s involvement with the company are probably trying to decipher the reasons behind the less than perfect performance from the last few trading days. We’ll try to help.

One theory is that the enthusiasm has simply cooled off. Apart from the 8-K, there was nothing else supporting the ticker at the highs it reached last month. Back then, the discussion boards and social networks were overflowing with VGTL supporters whereas right now, though there are still optimists, things are definitely quieter.

The lack of up-to-date financial information is also deterring some investors away. If you’re still determined to take the risk, however, you will do well to take a look at the latest 10-Q. Once you do, you’ll find another thing that could potentially be putting pressure on the ticker at the moment.

Last year, the company issued more than $787 thousand worth of notes that are convertible at discounts which range from 40% to 45%. That’s a lot of potential dilution, especially considering the sub-penny status the stock had for so long. Dilution, as you probably know, is one of the easiest way to send the price plummeting down.

Any silver linings? Well, the report says that the final maturity date of the aforementioned notes is September 1, 2015 (i.e. today) which means that through the power of guesswork and with the help of a lot of baseless optimism, we can assume that the conversion should soon be over.

Even if that’s true, however (and we’ve no way of knowing whether it is), things are still not looking good. The company hasn’t issued any press releases for almost six months and Ms. Antonetti hasn’t made even a single announcement as a CEO of VGTL. According to her Twitter profile, she does seem to be handling quite a lot of projects at once, but unfortunately, neither of them seems to be in any way connected to the company. She will soon visit, for example, the city of Prince George in British Columbia, Canada which, in case you’re wondering, is around 2,000 miles north-west of VGTL‘s corporate headquarters.