Borislav Tonev

Net Talk.Com, Inc. (OTCMKTS:NTLK) Jumps Again

by Borislav Tonev March 2, 2016

It is common belief among penny stock investors that fully reporting companies are generally speaking safer investment options than the enterprises that use the OTC Disclosure and News Service. Or is it? Well, on February 18, Net Talk.Com, Inc. (OTCMKTS:NTLK, NTLK message board) filed a Form 15 terminating its reporting obligations with the SEC and since then, the stock has been rather popular.

A strong session on February 25 pushed NTLK to $0.007 per share, and although it later dropped back down, yesterday, the ticker managed to register a rather strong bounce. A total of 21.6 million shares changed hands in a matter of six and a half hours while NTLK gained almost 70% and reached a close of $0.0056.

In light of the Form 15, the sudden increase in activity really does seem strange. It must be said, however, that there might just be some logic behind what at first glance looks like madness.

Complying with the SEC's strict rules and regulations isn't exactly cheap and a quick look at the latest 10-Q shows that expenses-cutting exercises should be high on NTLK's list of priorities. Here's a summary of the figures recorded on September 30:

  • cash: $98 thousand
  • current assets: $368 thousand
  • current liabilities: $14 million
  • quarterly revenues: $986 thousand
  • quarterly net loss: $651 thousand

Clearly, eliminating all the reporting and auditing fees should help the company to some extent, but will it be enough?

We don't know. What we do know is that in Q3 of last year, the revenues dropped below the $1 million per quarter mark for the first time in a very long time and we also know that the decline has been ongoing for quite a while.

Last but not least, we know that in Q1 and Q2 of 2015, NTLK was forced to issue about 91.6 million shares as a conversion of debt at an average price of $0.0018 a pop.

The numerous unknowns around the future coupled with the huge amount of discounted stock flying around turns NTLK into a risky investment option. Keeping a cool head and considering the potential pitfalls is absolutely essential.

About twenty-five minutes into today's session, NTLK is traded at $0.0052 per share (about 7% in the red).

Comments 0

Type the characters that you see in the box (5 characters).