Anastas Gegov

Liquidmetal Technologies Inc (OTCMKTS:LQMT) Stands Corrected

by Anastas Gegov March 18, 2016

Liquidmetal Technologies Inc (OTCMKTS:LQMT, LQMT message board) was traded below the 10 cent mark for quite some time before the ticker exploded onto the charts in the beginning of this week and attracted investor interest, as seen by the massive volumes that the stock recorded.

 

This was the result of a press release that came in Monday, announcing that the company has closed a financing transaction of up to $63.4 million with DongGuan EONTEC Co., Ltd. (SHE:300328). The details of the transaction weren’t discussed in the, apart from the fact that an increase of authorized shares will most likely take place.

 

The latest 8-K that the company has filed shows that LQMT wants to increase its authorized share count from 700 million to1.1 billion, which certainly leaves a lot of room for dilution. Considering the massive amount of the funding that was announced it is likely that there will be a lot of dilution and investors should keep that in mind when researching LQMT.

 

Furthermore, as we previously wrote, the company financials aren’t that good and it seems that LQMT isn’t doing a lot of progress. In fact, the latest quarterly report shows a decrease by more than 50% in the revenues, compared to the same period in the previous year, which doesn’t speak well.

 

This might be the reason for which the company stock didn’t manage to climb for a lot of time before it came sliding down. Yesterday we saw LQMT lose 12.31% in value and close at $0.114 per share, as a total of 3.97 million shares changed their owners and generated $472 thousand in daily dollar volume.

 

Considering the market cap that is sitting well above $50 million even after the correction and the possibilities of a massive dilution in the near future, we would advise investors to do their own due diligence and weigh out all the risks before putting any money on the line.

Comments 2

1. Guest
March 21, 2016, 12:41PM

Quotes This is why some people shouldn’t invest. You think just because this guy is going to pay 25 cents per share for 100,000,000 shares that the stock will be worth 25 cents per share for all investors. The fact is, if you average the price per share against the number of shares he has to buy, the average price is 15.75 cents per share. This is no guarantee that this will be the price per share for all investors. It could simply mean that he’s going to be taking a bath on his investment in LQMT, just like many of investors before him.

2. Guest
March 21, 2016, 07:14AM

Quotes The sale of new shares is in tranches of 16 cents and 25 cents, both of which are at a higher price than current market price.

Issue of shares at higher prices than current market rates are good for the existing shareholders as they own a smaller piece but of a more valuable company (The 63.4 million dollars increases the Share Capital which increases market cap from 50 to 113.4 million dollars).

The deal is good for existing shareholders as it will bring the share price in the ballpark of 25 cents in the next few months and beyond in the upcoming several months once the RFPs are realised.

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