Georgi Kamburov

Orbital Tracking Corp (OTCBB:TRKK) Explodes Up The Chart

by Georgi Kamburov May 18, 2016

On Monday the stock of Orbital Tracking Corp (OTCBB:TRKK, TRKK message board) finished the trading day with a massive gain of 63% but even that was nothing compared to the outcome of yesterday's session. In the six and a half hours of trading the ticker managed to soar by 244%, arriving to a close at $0.31 per share. In a state of buying frenzy investors shifted the unprecedented for the stock amount of 7.62 million shares. Just for comparison the monthly average stands at 342 thousand shares.

The reason for the drastic change in sentiment was the financial report for the first quarter of the year that TRKK filed on Monday. So let's open it and see if the numbers inside justify the ecstatic enthusiasm that was displayed by the market. TRKK finished the quarter ended March 31, 2016, with:

• $391 thousand cash
• $1.44 million total current assets
• $852 thousand total current liabilities
• $1.3 million net sales
• $60 thousand net income

Compared to the same period last year the revenues generated by the company increased by 62%, an already impressive achievement, but on top of it TRKK also managed to finish the quarter with a positive bottom line of $60 thousand when a year ago they reported a net loss of over $400 thousand. In the PR talking about the quarterly results TRKK's CEO expressed his believe that for the rest of the year the company will continue to see growing top line revenues and improving margins.

As always, getting overly excited may be extremely risky. TRKK remains a pennystock and as such the red flags around the company must not be underestimated. Throughout the years Orbital Tracking have been issuing millions of preferred convertible shares from the company's various series of preferred stock. In our previous articles we talked about the 4.25 million preferred D shares that were issued as a satisfaction of just $99 thousand in debt at an average price of $0.023. Each series D share can be converted into 20 common shares.

The quarterly report revealed that, indeed, quite a lot of conversions of preferred shares have taken place since the start of the year. During the first quarter 119 thousand series D shares were turned into 2.38 million common shares while 37,500 series E shares were converted into 375 thousand common shares. Then, there is the subsequent events section, according to which between April 1 and May 4 another 2.68 million common shares saw the light of day through conversion of preferred shares.

TRKK is also a perfect example of the fact that even companies offering real products and services, sizable revenues, and profitable operations can still be targeted by paid pumps. In March over 30 alert emails attempted, but were rather unsuccessful, to create as much artificial hype as possible. The last wave of pump emails for the company came on April 17 and 18  with the newsletter Stock Commander bagging the biggest compensation among the participating promoters of $170 thousand.

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