Borislav Tonev

Experience Art and Design Inc (OTCMKTS:EXAD) Chopped in Half

by Borislav Tonev April 4, 2016

Experience Art and Design Inc (OTCMKTS:EXAD, EXAD message board)'s website says that the company “is a roll-up of existing enterprises with proven multi-year operating histories and profits”. At the moment, this description isn't terribly accurate. “EXAD is trying to be a roll-up of existing enterprises with proven multi-year operating histories and profits” sounds closer to the truth. It is trying indeed.

On March 7, the company announced that a letter of intent for the acquisition of a dry cleaning business has been signed and promised that if everything goes according to plan, there will be an 8-K form containing some interesting financials within seventy-five days of the closing of the deal. Last week, EXAD said that another acquisition is in the pipeline. A multi-store dry cleaning operations should be acquired within the next three months and it should push EXAD closer to its goal of $500 thousand in monthly revenues.

By all means, this should be massively good news. After all, you don't really need to spend hours researching the company in order to see that its previous business plan failed rather spectacularly. The new dry cleaning endeavor might just be the saving grace everyone is hoping for.

Unfortunately, the stock doesn't seem to be responding accordingly. The announcement of the second potential acquisition came out on March 31, but instead of pushing the stock up, it actually caused a pretty terrible crash.

On Friday, EXAD opened the day with a small gap up, but it almost immediately plummeted down and after logging a brand new 52-week low and shifting quite a lot of shares, it stopped at $0.003 per share – exactly 50% below the value at the end of Thursday's session. So, what exactly is going on?

Well, the pumpers are involved. They touted the ticker when the first acquisition was announced and they came back to it for the second one. Best Damn Penny Stocks and The Next Big Trade received $12,500 and the people who wrote the email alerts askedHow high can EXAD go?”. Not very high as it turns out.

The erratic performance shouldn't be too surprising, though. EXAD's O/S count climbed from just over 25 million in August of last year all the way to nearly 150 million on January 20, and with that sort of dilution, any sort of significant moves up the chart will be very hard to sustain.

Last week, the company said that the 2015 10-K won't be published on time. Hopefully, once it comes out, it will contain some much needed info on the recipients of the newly printed shares and the reason for their issuance.

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