Martin Tsvetkov

Panasonic Corporation-Related news Pushes e.Digital Corporation (OTC:EDIG) To a Record Low on the Stock Market

by Martin Tsvetkov June 30, 2011
EDIG_chart.pngWhat happens when a penny stock company collaborates with a giant corporation? Are investors in for a big bang, or are they bound to go nowhere? Considering what e.Digital Corporation (OTC:EDIG) did yesterday on the market, one can draw the conclusion that Wednesday's bombastic press release failed to serve its purpose.

Two days ago, EDIG announced it had entered into a confidential agreement with consumer electronics giant Panasonic Corp. As expected, the news immediately kicked up a huge fuss about EDIG stock, triggering a massive and rigorous trade. Yet, who would have thought that EDIG stock will eventually halve in value and crash down to a 23-year low?

Unfortunately to many traders, EDIG indeed collapsed yesterday, digging to a new all-time low of $0.042 per share. Obviously, the preceding huge news turned out to be a double-edged sword as it made for a massive sell-off. As a result, EDIG shifted almost 11 million shares during the latest session, setting at least a three-year peak. Thus, EDIG is by no means one of the most stable penny stocks anymore.

EDIG_logo.pnge.Digital specializes in developing novel multiple audio and video technology platforms. The company has created a proprietary mobile entertainment system, i. e the portable Video on Demand eVu. At present, EDIG has adopted a highly transparent financial policy toward its stockholders by filing its regular reports with the SEC. Last week, the company submitted a full-blown 10-K annual report. Covering the fiscal year ended Mar. 31, 2011, EDIG's unaudited balance sheet contains:

  • $1.8 million in cash vs. $2.8 million a/o Mar. 31, 2010;
  • working capital surplus of $2 million as opposed to $3 million accumulated in Q1 of 2010;
  • $1.29 million in revenue, or 50% less than the revenue accrued in Q1 of 2010;
  • net loss in excess of $1.08 million vs. $0.81 million incurred in the corresponding quarter in 2010.

While EDIG appears to have a relatively stable financial health, the situation runs the risk of a dramatic change, provided the company fails to cope with its growing losses.

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