Voip-Pal.com, Inc. (OTCMKTS:VPLM) Surges Unexpectedly
As you can see from the chart on the right, Voip-Pal.com, Inc. (OTCMKTS:VPLM)’s stock performance over the last few months hasn’t been what you’d call “consistent”. The ticker made a rather impressive run in January and it managed to hit a 52-week high of $0.31 per share, but it failed to sustain the increased value and a few heavy corrections brought it down to $0.25 just a couple of days later.
The behavior since then has been just as shaky and despite last Monday’s press release, according to which the company’s sixth patent has been given the green light, VPLM slipped below the $0.20 per share mark. Yesterday, it managed to recover nicely.
The ticker opened the day at $0.18 and although it spent a large portion of the day in the red, it made an impressive run during the afternoon. A lot of buying pressure pushed the dollar volume up to around $710 thousand while the price increased by a healthy 25%. VPLM closed the session at $0.2329 per share which commands a market cap of around $206 million.
A peculiar thing about the jump is the fact that it doesn’t seem to be caused by anything immediately obvious. The stock has been promoted in the past, but we haven’t received any email alerts for almost a year. The latest financial statement got published two weeks ago and there have been no press releases since March 10.
The dollar volume, however, is big enough to draw the attention of quite a lot of people and we can see that the message boards are buzzing with activity. Many investors are somewhat baffled by the impressive climb, but there’s also a large group of traders who reckon that the buying witnessed yesterday was caused by people who know something about upcoming events that will be announced soon. The future should tell us if these predictions are correct, but in the meantime, we might as well take a look at VPLM‘s latest financial statement and see if the company really deserves its $206 million market cap.
A quick look reveals that there are some good news and some bad news. The latest report covers the three months ended December 31 and it presents the following figures:
- current assets: $125 thousand in cash
- current liabilities: $29 thousand
- no quarterly revenue
- quarterly net loss: $611 thousand
As you can see, apart from the lack of revenues and the limited cash reserves, the balance sheet doesn’t look quite so bad. What’s more, when you compare the latest statement with its predecessor (the annual results for the twelve months ended September 2013) you’ll see that they have managed to satisfy almost all of the liabilities.
The problem is, they did it by issuing vast amounts of stock. As much as 155 million shares saw the light of day during the forth calendar quarter of 2013 and 125 million of them were printed either as a conversion of debt, or in exchange for professional services. They were all valued between $0.012 and $0.08 per share which, as you can see, presents quite a discount.
On the bright side, only 6 million of the newly issued shares bear no restrictive legend, but you should keep in mind that sooner or later, the rest of the discounted stock will join the float and it will probably put a lot of pressure on the price.
A steady stream of revenues might lessen the dilutive effect, but let’s not forget that VPLM is in the business of acquiring patented technology and then selling it or licensing it. According to the financial report, three of the patents were issued as of December 31 and yet, they failed to bring in any sort of consistent proceeds. Of course, the company’s portfolio is now bigger and so are the chances of licensing some of the technology, but even so, there are still some unknowns.
Considering the risks and doing a lot of due diligence is, as always, absolutely essential.
The run displayed by VPLM during yesterday’s session was certainly impressive, but it was nothing compared to the surge experienced by Growlife Inc (OTCBB:PHOT). PHOT managed to rack up an astonishing dollar volume of nearly $64 million while jumping up by as much as 32%. Cannabusiness Group (OTCMKTS:CBGI)’s run was just as remarkable. It gained 73% while shifting around $15.63 million worth of shares.
