Dragni Dragnev

American Brewing Company Inc. (OTCBB:ABRW) Slips Once More

by Dragni Dragnev July 13, 2016

American Brewing Company Inc. (OTCBB:ABRW, ABRW message board) managed an impressive climb after announcing that its latest acquisition has gone off without a hitch – but now it has found itself stumbling.

It is not difficult to see why the news of the acquisition being completed would cheer investors up. After all, when done right, mergers and acquisitions can open a lot of doors for OTC Markets companies and give them many opportunities to capitalize on new markets.

However, as it stands, we don't really know what doors the addition of New Age Beverages and Xing Tea opens for Búcha. What we do know is that the company paid for the acquisition with $20 million worth of its stock in one form or another. For all we know, this may have been a good deal – then again, it might not have been.

We simply do not know what the deal did to improve ABRW's overall financial and commercial situation. Last time we checked, ABRW's filings revealed a rather grim picture:

  • Cash - $151 thousand
  • Total current assets - $669 thousand
  • Total current liabilities - $768 thousand
  • Quarterly Revenues - $589 thousand
  • Quarterly Net loss - $288 thousand

Has this state of uninspired mediocrity been remedied? Surely, ABRW's situation can't have remained the same – that much is certain. Unfortunately, since there is no reliable information on precisely how ABRW's situation has changed, there is no way for investors to be sure that all of this is for the best, and the fact that there is room for serious doubt on the matter means that the ticker can't really remain stable.

Sure, the company's latest announcement caused some hype, but as yesterday's shudder can attest, once such hype dissipates, investors are left unsure of their steps.

With this in mind, it seems like a 5.61% slip is one of the least dramatic things that could happen to a ticker in such a situation.

So what should investors take away from all of this? Well the fact remains that ABRW is currently volatile, which means that windows of opportunity for profit may pop up, and bold opportunistic traders may be able to successfully exploit those. However, even attempting to do so will be a risky affair – and investors should only consider committing to ABRW stock knowing full well the dangers involved.

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