Peter Hristov

Cord Blood America Inc. (OTC:CBAI) Rests on Low Volume Despite Financial Results

by Peter Hristov August 12, 2011
4CBAI_chart.pngCord Blood America Inc. (OTC:CBAI, CBAI message board) scored a positive trading session yesterday, when it announced the financial results of the last quarter.

In a press release, issued simultaneously with the financial report, CBAI declared a 61% increase in revenues and a 100% increase in the gross profit as compared to the same period last year.

Apparently, the words of the company quickly resonated on the market and the promotional sphere. Investors rushed for the stock, pushing CBAI share price up 15% to $0.12. However, the trading volume of 630 thousand shares was lower than the daily average.

At the same time, CBAI announcement was reiterated in a promotional press release. OTC Picks featured CBAI in its daily newsletter after the end of the session, so maybe the effect will unfold today. OTC Picks explicitly specified that it did not receive any compensation for the coverage of CBAI.

0CBAI_logo.pngA deeper look at the company's freshly issued report would reveal that despite the increase in revenues and gross profit, which is generally accepted positively by the market, the company still has some gaps to fill in its finances. On the first place, this is the working capital deficit of nearly $5.3 million. Second, there is still a considerable net loss of $1 million for the last quarter.

But the most important thing is that apparently CBAI didn't generate its cash flow from its operating activities. On the contrary, the company has lost $1.7 million in operating activities, while $2.2 million were provided by issuance of common stock and notes payable.

Perhaps, it is this details that can explain why CBAI's announcement didn't provoke more trading activity that usual yesterday.

Comments 0

Type the characters that you see in the box (5 characters).