Georgi Kamburov

Elephant Talk Communications, Inc. (NYSEMKT:ETAK) Resort To Self-Funded Promotion

by Georgi Kamburov August 13, 2013
ETAKchart.pngWe last wrote about Elephant Talk Communications, Inc. (NYSEMKT:ETAK, ETAK message board) back in 2011 when the company had just dropped from its high of $4 per share. In the past two years the shareholders of the company have had little to be optimistic about when ETAK has been going nowhere but down losing 80% of its value and currently trading around $0.8.

Last week the management of the company finally decided that something should be done in order to reassure investors and boost their confidence. First a paper letter from the CEO was distributed to the shareholders on record regarding the fundamentals of the company and the business plans for the near future.

In it they mainly stressed upon the high margin mobile service division that has been experiencing revenue growth for the past seven consecutive quarters. The CEO has decided that the best way is to lead by example and has personally contributed $4.5 million out of the $12 million raised in the recent direct offering.

Still when the financial report for the second quarter of 2013 arrived last Friday investors weren't impressed at all and ETAK barely managed to finish 0.7% above its previous close. They disclosed having:

  • $2.9 million cash
  • $9 million total current assets
  • $14 million total current liabilities
  • $4.9 million revenues
  • $7.2 million net loss

The report shows that although one division is doing increasingly better revenues as a whole have gone down from the $7 million earned for the same period last year. Net loss on the other hand is up from $4.9 million. The company expects better results by the end of the year after closing a deal with Iusacell in Mexico. The new contract is expected to add a minimum of 1.5 million SIMs to their software platform and increase recurring revenue base by 100%.

In a rather surprising move though ETAK has decided to further boost the movement of its stock and has agreed to pay $100 thousand to Equities Awareness Group for a wave of alert emails. It is a rare sight when a company decides to fund its own promotional campaign but nonetheless TheStockBrainiac, StockEdge and Premier Equity Reports have issued their email touts. MJNAchart1.pngThe results are now quite evident when in early trading today ETAK is 3% up on a traded volume more than doubling the one from the previous session.

Another company that issued its quarterly report on the same day as ETAK and also failed to inspire much confidence is Virtual Piggy, Inc. (OTCBB:VPIG). The company is still maintain the current $2 price levels almost doubling the ones from March. The industry wide resurgence that was brought by Dr. Sanjay Gupta's new positive stance on medical marijuana is still going strong. Medical Marijuana Inc. (OTCMKTS:MJNA) has once again risen to become one of the top traded stocks on the market adding 30% to its value to close at $0.23.

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