Georgi Kamburov

Will BTCS Inc (OTCMKTS:BTCS) Stop Crashing?

by Georgi Kamburov July 14, 2016

There are few words that can describe the performance of the stock of BTCS Inc (OTCMKTS:BTCS, BTCS message board) since the start of June. That is why we are going to use numbers - at the start of last month the ticker was hovering around 10 cents per share while this Tuesday it closed at exactly $0.001. This means that in what is a period of a little over 5 weeks the company has lost 99% of its value.

Yesterday, however, BTCS managed to avoid sinking even lower and dropping into the triple-zero price ranges and instead registered their first positive session since June 30. The stock climbed upwards by 8.3% and reached a close at $0.0013. Is this a sign of a more prolonged recovery or was it just a brief stop before another steep slide towards the bottom of the chart?

Well, judging by the fact that BTCS is still plagued by devastating dilution that appears to only be growing with each day the latter appears to be far more likely. In our previous articles we talked about the amount of shares that the printing presses of the company have been churning out lately - 49.8 million shares between June 16 and June 21 followed by 37.8 million shares for the period between June 22 and July 5.

Instead of slowing down, however, as we said earlier things are only getting worse and worse. Just take a look at the latest filing submitted by the company. In the 8-K form that came yesterday BTCS revealed that over 103 million shares had came into existence in the six days between July 6 and July 12. As of May 16 the company had 157 million outstanding shares but now that number stands at more than 510 million shares.

The obligations of the company are also growing at an alarming rate. According to the 8-K filing BTCS will now have to issue 3.5 billion shares as well as warrants for the purchase of 1.7 billion shares. In addition, the conversion price of the company's outstanding junior and senior convertible notes will have to be lowered to $0.00078.

The troubles for BTCS began at the start of May when the company was informed that a district court in Israel had appointed a temporary liquidator for Spondoolies Tech Ltd. BTCS were planning to merge with Spondoolies with the management team of the company even escrowing 12 million shares that will be canceled if the merger isn't completed successfully by the end of year. The CEO and COO of BTCS will lose another 12 million shares if an uplisting to a higher exchange doesn't take place by December 31. At the time the escrowed shares represented 15% of the total outstanding shares.

The judge presiding over the Spondoolies case set a hearing date of July 14, which is today, but BTCS has already stated that it considers its $2.25 million investment as not recoverable. Still, any positive news could be enough to at least slow down the downfall of the stock.

In early trading today BTCS are crashing hard currently sitting over 23% in the red at $0.001.

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