It's been a year since Urban Ag Corp (OTCMKTS:AQUM
, AQUM message board
) entered the telecommunications industry and it's fair to say that in terms of stock performance, AQUM has left a lot to be desired. Back in February 2013, the ticker was hovering around $0.05 per share and trading was pretty uneventful.
In an attempt to change that, the pumpers launched a promotional campaign in April. They did manage to draw some attention towards the stock, but the effects were far from impressive. The start of touting coincided with the start of a prolonged slide which resulted in AQUM dropping below the $0.01 per share mark in July and later plummeting down to the land of the triple zeroes.
Volumes slowly subsided and it seemed as if nobody is interested in the stock anymore. Having gone through the latest 10-Q, we can see why. Here's a summary of the most important figures as of September 30:
- cash: $27 thousand
- current assets: $214 thousand
- current liabilities: $12.8 million
- quarterly revenues: $195 thousand
- quarterly net loss: $536 thousand
The Q3 balance sheet looks bad enough on its own, but when you compare it to the one covering the same period of 2012, you'll see that things are even worse. The revenues have experienced a massive 90% drop year-over-year while the current portion of the liabilities have increased by as much as 48%.
There's one more thing pushing the price down - the catastrophic dilution. AQUM issued a mind-bending 967 million shares in a matter of just three months. The latest 10-Q says that the total OS count was hovering just above the 1 billion mark on November 19, but according to the company profile on OTC Markets' website, the number of issued shares was nudging 2.3 billion on January 7.
As we mentioned in our previous articles, the company CEO, Billy V. Ray Jr, was once at the helm of another telecommunications enterprise called Charys Holding Co (CHYS) who filed for bankruptcy back in 2008 and, having all the facts above in mind, we won't be surprised to see AQUM following in CHYS' footsteps at some point in the future.
And yet, on Friday, investors didn't really seem all that bothered about AQUM's horrific state. The ticker managed to shift more than 1.6 billion shares in just six and a half hours resulting in a dollar volume of around $833 thousand. Predictably, the price swung wildly. AQUM opened the day at $0.0003, hesitated a bit during the first few minutes, but then surged to an intraday high of $0.0007. It eventually dropped to $0.0005, but it still managed to log 150% in price gains.
The peculiar thing is, there doesn't seem to be an immediately obvious cause for the sudden and violent surge. The latest press release came out more than two weeks ago, the latest SEC filing is now more than a month old and there aren't even any paid pumps. In fact, the only thing that could possibly be pushing AQUM towards the higher end of the charts is a rumor around message boards about the company's entrance into the marijuana industry.
AQUM have yet to confirm the speculations, but if they do announce a shift in the business, they will become just one of the many small cap enterprises (Primco Management Inc (OTCBB:PMCM) and Fastfunds Financial Corporation (OTCMKTS:FFFC) are prime examples) that suddenly started looking at the cannabis industry in an attempt to draw attention to their otherwise dormant stocks. Such an announcement will probably cause even more stir on the market, but we reckon that with the financials above in mind, AQUM will have some serious issues maintaining the share price which will inevitably become disproportionately inflated. That's why, doing a lot of due diligence and carefully thinking through every single trade is absolutely essential.