Hristina Beeva

Global Digital Solutions, Inc. (OTCMKTS:GDSI) Steps Away from Peak on Substantial Selling

by Hristina Beeva June 28, 2013
Global Digital Solutions, Inc. (OTCMKTS:GDSI, GDSI message board) is one of those companies that rises in volumes and price even without an active promotion. On Thursday, the ticker was sold off, falling nearly 18% to $1.06 on around $290,000 selling volumes. The stock is mostly moved by the announcements of the company becoming a supplier for the US defense industry. GDSI0628.png

But we must remember that GDSI is only on the planning stage to acquire Airtronic USA. Such an acquisition may in fact be a way for Airtronic to gain exposure to the OTC markets. Let's see how well GDSI has been doing financially, and if the three-year price height is justified. The company shows: PWEI0628.png

  • $385,000 cash
  • $780,000 total assets
  • $1.3 million total liabilities
  • Zero revenues
  • $631,000 net loss for 2012

GDSI had very low losses in 2010 and 2011, but also no activity. The first year of more active business, the company has accumulated some debt and losses, though not catastrophic. Still, this means a real pickup in activity and visibility in 2013, which is already reflected in the ticker's price. Defense contracts are usually an amazing opportunity for companies to make stable revenues, but we must see the buyout materialize first. Otherwise, GDSI proclaims it is an expert in telecom services.

GDSI started trading more actively in September 2012, and had a low 1 million share free float, which has increased to a bit more than 10 million, with around 53 million shares outstanding. The promotional email from March states that GDSI works with large telecom clients, although so far this has not been reflected in the financial data. This raises something of a red flag, and at a dollar, the company is at risk for a significant correction.

The promoter for GDSI was Penny Stock Explosion, which advertised the company unpaid, and before that the company only saw a $10,000 campaign in the winter of 2012. Penny Stock Explosion is a small-scale pumper that drove infamous tickers such as Pac West Equities, Inc. (OTCMKTS:PWEI), a company with totally baseless claims that rose on a long and well- paid promotional effort.

The graph of GDSI also recalls that of Montalvo Spirits, Inc. (OTCBB:TQLA), which rose significantly, but stalled a bit above the dollar, sliding down by more than 25% in the past days.

In the case of GDSI, do your own research, and respect the red flags pointing to potential losses. It is best to avoid investing sums you cannot afford to lose in part or in whole.

Comments 1

1. Guest
June 28, 2013, 11:52AM

Quotes Planning stage? It's nearly through bankruptcy court, which in the meantime recently approved GDSI's working cap loan to Airtronic...

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