Vidaroo Corp (PINK:VIDA) At the Top of the Charts

The emails stopped, there were no announcements, and just when we thought that the dust had settled, Vidaroo Corp (PINK:VIDA) surprised everybody when they gained a total of 83% during Friday’s trading session. The volume was quite impressive as well – 35 million shares changed hands, when you consider that the average number over the last thirty days has been 1.89 million. So what caused all the stir?

Well, there is no apparent reason. As we mentioned, the last emails that we received as part of the promotional campaign are dated April 5 and the same day saw that latest announcement about the aggressive marketing strategy that we wrote about in our previous article. In any case, we’re sure that VIDA‘s shareholders are certainly hoping for the upward trend that began in Friday to continue in the coming days, weeks and months since the pump from the beginning of April had a devastating effect on the price.

The first email started hitting the inboxes on March 27 and the high of the day back then was $0.019 per share. On Friday, just a couple of weeks later, they opened at just $0.003 which means that they have lost as much as 85% in a very short period of time. This means that even with the 83% jump they are still way off the pre-pump value. But can they recover completely?

Well, there are certainly a lot of doubts about that. You could say that their product has some potential. It’s an online video platform and it should allow you to upload your content on VIDA‘s servers in exchange for a monthly subscription. You can also customize the way the video player looks, put advertisements on it, share it virtually everywhere etc. While it does sound good, VIDA have stiff competition in the face of giants like YouTube and a host of other online video sharing platforms.

Despite all this, when you take just a quick glance at VIDA‘s financial statement, you will see that they have generated around $248 thousand in revenue for the fourth quarter of 2012 which, considering the fact that the platform has yet to gain worldwide recognition, is not that bad. When you read on, however, you will find that about a half of that amount came through additional operations which were recently abandoned by the company management meaning that their future financial statement will probably look a bit more depressing.

That’s not the only issue. While the revenue does not look that bad, they have still registered $127 thousand in operation losses and if their video sharing portal that is shaping up to be their only source of revenue isn’t as successful as they are hoping it to be, things might get pretty ugly really soon.

They will need to be in a hurry with the success of the website too, since the quarter covered in the report ended with just $38 thousand in current assets and $627 in liabilities that will need to be satisfied before the end of the year.

At least we can’t blame them for not trying. As we wrote in our previous article, they announced that they intend to launch an aggressive marketing campaign which, they hope will bring some much-needed fame to their online video platform. We would have liked to learn a bit more about how it will be financed but, apparently, we’ll just have to wait and see how much of an influence it will have on VIDA‘s success.

One thing is for sure – the marketing program will need to work if they want to protect their shareholders from the massive dilution that has been crushing the investments recently. Because of the dismal assets and lack of cash, VIDA were forced to convert some of the outstanding notes into a huge number of shares. On March 15, for example, VIDA published an 8-K form which stated that they are converting $5,500 into a whopping 55 million common shares. This is a massive blow to the stockholders, but it could also be a chance for some people to make a quick profit probably with the help of pumps similar to the one that took place at the beginning of the month. If that happens again, it could crush the ticker completely, and we’re pretty sure that nobody wants to see that happening.