Two consecutive trading days with large volumes could be pointing to upcoming changes in CryptoLogic Limited (NASDAQ:CRYP
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) stock price. The company itself remains silent, with seemingly little changes taking place behind the curtains of publicity.
What can be expected of a penny stock, that was on a downtrend for the past half a year? A short bounce is likely to be the only thing we get as the company has little improvements to show on their financial statement and the prospects don't look too good.
Revenues continue to go down and expenses stay the same. Cryptologic is trying to restructure their costs since the late 2008, when it became clear that some operations could be outsourced. Yet, the restructuring plan is taking too long and doesn't seem very effective.
With the current price, the company is worth around $20 million on the market, which corresponds to the $23 million net tangible assets. As the cash position is being constantly reduced by losses from operations, the net valuation is going down as well. Market cap obviously doesn't want to get below $20 million before the fundamental valuation does, so it could be assumed that the current price level is rock bottom until updated financials come out.
The online casino gaming company is trying to lure clients with new product packages. However, after the very disappointing results seen throughout 2010, the new offers would have to be quite successful just to keep the books in black. Sustained growth is out of the question for now.