Georgi Kamburov

Sitoa Global Inc. (OTCMKTS:STOA) Doubles In Value

by Georgi Kamburov June 12, 2013
STOAchart.pngWith another great run during yesterday's session Sitoa Global Inc. (OTCMKTS:STOA, STOA message board) closed at $0.007 and returned to the price levels from early March. The stock added 50% on Monday and followed with an even more impressive 94% gain on a record traded volume of 99 million shares.

Sitoa provides e-commerce solutions and services that enable B2C (business-to-consumer) and B2B (business-to-business) transactions. They currently hosts 4 e-commerce platforms for their clients but don't let that number fool you. STOA are generating stable stream of revenues and are even making a profit. They finished the first quarter of the year with the following results:

  • $382 thousand cash
  • $542 thousand total current assets
  • $409 thousand total current liabilities
  • $883 thousand revenues 
  • $28 thousand net income

A positive balance sheet is not a common sight in pennyland. But the current positive trend of the underpriced stock has little to do with the underlying fundamentals of the company.

No, investors are getting excited about the ticker because by the end of the month an official news regarding their newest acquisition should come out. Back in March STOA announced that they have began negotiations with IRIS Corporation Berhad in order to purchase renewable energy assets in exchange for common shares. After the finalization of the deal IRIS will become the major shareholder of STOA. And according to the article the acquisition should be completed by the end of the second quarter or in less than three weeks from now.

STOAlogo.jpgIRIS are a major company listed on the Malaysian stock exchange. They have a diversified portfolio of business activities ranging from IT technologies to Food and agriculture and Renewable Energy. According to their annual report they finished 2012 with 40 million RM or approximately $12.7 million.

So the deal may seem a bit too good. Especially when you try to open the official site of STOA listed on OTCmarkets and you are greeted by a page declaring titled "future home of something quite cool". Now factor in that between January and March $153 thousand in debenture notes were converted into 55 million common shares by the note holders. This makes the price per share around $0.0027 or significantly lower the current levels so they may have already raked in a significant profit.

The promotion for STOA is a bit subtler with no participating newsletters. With rumors abounding on discussion boards and investment forums the ticker may continue its run until an official statement has been made. Just keep n mind that the risks around the stock are significant enough to warrant doing your own research.

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