Easy – even the most suspicious tickers can, on occasion, attract attention to themselves and be carried upward for a while, before crashing to the ground, burning out and smoldering away to illiquid obscurity.
AJBI had seen little to no trade for a long time, then gained a bit of traction with a couple of announcements, and now it is headed right back where it started from.
And, as sad a turn of events that might be, one could argue that it is entirely fitting, for reasons that become obvious after a bit of due diligence.
Suffice it to say that the company’s latest financial report looked like this:
- Cash - $0.5 thousand
- Total Assets - $5 thousand
- Total Liabilities - $333 thousand
- Quarterly Net loss - $64 thousand
Those numbers clearly illustrate why a correction of AJBI’s $14 MILLION market cap might have been in order – but the red flags don’t really end there, either.
Seasoned investors well know what to look for when examining the filings of dubious OTC markets pinksheets companies – and one of the first things they need to check is the company’s toxic debt. Now, admittedly, AJBI doesn’t have a lot of notes outstanding, but the debt that is out there can be converted into common stock at rates like:
- “the lesser of the closing price of the Company’s common stock on the trading day prior to closing or 35% of the lowest trade reported in the 30 days prior to date of conversion.”
- “the rate of 50% of the average closing trade price reported in the 5 days prior to date of conversion”
With this in mind, it should be pretty obvious why AJBI crashed as hard as it did, in spite of issuing an optimistic press release.