Will Dominovas Energy Corp. (OTCMKTS:DNRG) Crash Today?
Dominovas Energy Corp. (OTCMKTS:DNRG) exploded up the charts once more yesterday, on account of publishing yet another piece of boastful PR.
And the press release that hit the web before yesterday’s trading session was boastful indeed, full of impressive words like “relentless” and huge numbers covered by forward-looking statements.
The PR did no less than it was expected to do – it pushed DNRG up the charts once more, on a heavy volume. However, good news or no, the jump left the ticker in an extremely precarious state.
Still, investors might want to be wary – one glance at the charts reveals the results of the last time DNRG made such dramatic leaps based on hype. The crash that followed was devastating to say the least, and the worst part is that the cause for said fall is still an issue for DNRG. Why?
Because, as its latest financial report mentioned, DNRG still has a third of a MILLION dollars worth of convertible notes with “conversion price for each share equal to the lowest closing bid price for the common stock for the thirty trading days ending on the trading day immediately before the conversion date multiplied by 50% at any time up to [and after] April 28, 2015”.
Said debt currently converts at rates of $0.0022. Of course, there is no guarantee that Kodiak will flood the market with cheap shares, crashing the ticker, but logic dictates that if Kodiak wants to make the most out of the note, he would want to wait for the opportune moment before selling his extremely cheap shares. Yesterday was just such a moment, and today’s session will probably present another – only this time, the announcement hype that made DNRG soar will likely be dissipating.
Thus, it is very likely that the ticker could find itself in a position where the factors pushing it up are faltering, while those pulling it right back to the bottom of the charts are becoming more and more relevant.
Investors should definitely take that possibility into consideration before making up their mind about DNRG.
