ZAP (OTCMKTS:ZAAP)’s Ride Gets Choppy
It’s pretty clear from the chart on the right that ZAP (OTCMKTS:ZAAP)’s performance has been pretty turbulent over the last few weeks. On March 6, the company announced that they are planning on launching a new electric car and it would appear that this was enough to draw quite a lot of attention.
Although the press release came out in the afternoon, the interest was high enough to propel the ticker on a 300% run. ZAAP closed March 6’s session at $0.40 per share and racked up a dollar volume of more than $1 million. Unfortunately, the run proved to be quite short-lived. Just twenty-four hours after the breakout, the stock was sitting at $0.23 – 42% below its previous close while the dollar volume during the second session was even more astonishing.
The slide didn’t end there. ZAAP managed to close March 10’s session in the green, but it them took a few more hits and slipped below the $0.20 per share mark just two days later.
Miraculously, it has managed to recover some of the lost ground. Last Friday marked the start of a new ascend towards the higher end of the charts with around 15% in daily gains and the first two sessions of this week proved to be even more successful. On Monday, ZAAP added more than 36% to its value while yesterday, it jumped by 10% while racking up a trade value of around $1.57 million. It closed the session at $0.3315 per share which commands a market cap of around $100 million.
That’s an awful lot of movement for a ticker that seemed all but forgotten less than a month ago, but, perhaps more surprisingly, it doesn’t seem to be caused by anything immediately obvious. Unlike many thinly traded enterprises such as Primco Management Inc (OTCBB:PMCM) and Discovery Minerals Ltd (OTCMKTS:DSCR), ZAAP have no plans of entering the scorching hot marijuana industry and that may not be such a bad thing since we’ve seen a couple of newly born pot stocks (Aventura Equities (OTCMKTS:AVNE) and Petrotech Oil & Gas Inc (OTCMKTS:PTOG)) get suspended by the SEC for getting a bit too optimistic about their new business plans.
ZAAP is following their original model, but although the announcement of the new SPARKEE electric car is certainly a good piece of news, we’re not really sure if it’s substantial enough to justify the huge volumes we’ve seen over the last couple of weeks. What’s more, as we mentioned in our previous articles, the figures found in the latest 10-Q aren’t exactly perfect and they certainly aren’t substantial enough to support the current market cap. But if the reports and the news aren’t causing all the commotion, then what is it?
It’s really hard to tell. There doesn’t seem to be a traceable paid promotion and although the message boards are quite active, not everyone is convinced about the future. Truth be told, there isn’t much to persuade the skeptics.
Some links to Chinese websites are flying around and people are desperately trying to use Google’s automatic translation service to see if ZAAP‘s cars have passed the compulsory crash tests. The heated discussions would have been meaningless if the company was to publish this information in English, but apparently, they don’t deem it necessary.
Even if the crash tests are a success, we’re still not convinced that this alone is enough to support the stock. Speaking of which, about two hours after today’s opening bell, ZAAP is sitting at $0.29 which is roughly 12% below yesterday’s close.
There are plenty of things to suggest that ZAAP is a dangerous proposition. The turbulent performance from the last few weeks alone could be enough to scare the more risk-averse investors. If you still like the company and its business plan, you might want to weigh the risks carefully and do a lot of research before putting any money on the line.
