Georgi Kamburov

Orbital Tracking Corp (OTCBB:TRKK) Gets Cut Nearly In Half

by Georgi Kamburov May 19, 2016

After two explosive sessions during which the stock of Orbital Tracking Corp (OTCBB:TRKK, TRKK message board) soared from an opening price of $0.06 to a close at $0.31, yesterday the ticker suffered a painful crash. By the time the closing bell put an end to the trading TRKK had already wiped almost 42% of their value closing at $0.18. Despite the severe crash the stock is still holding on to a sizable portion of its gains but will it manage to avoid slashing even more of its value?

On Monday Orbital Tracking Corp submitted their quarterly report for the first three months of 2016 and it gave investors several reasons to get excited. Not only did the revenues generated by the company grow by 62% on a year-over-year basis but TRKK also finished the quarter with a positive bottom line. As of March 31, 2016, the company had:

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

In our previous article, however, we warned you that alongside the positive achievements of the company it is also vital to take into consideration the rather serious red flags.

TRKK have millions of preferred convertible shares from several different series that, if converted, could severely dilute the common stock. And this is exactly what has been happening since the start of the year. During the first quarter 119 thousand series D shares were turned into 2.38 million common shares and 37,500 series E shares were converted into 375 thousand common shares. Between April 1 and May 4, again as a conversion of preferred shares, 2.68 million new shares came into existence. In short, TRKK's outstanding shares have grown from 19.2 million at the end of 2015 to 24.8 million as of May 12.

And yesterday the company submitted a new 8-K filing revealing a new series of Preferred G Convertible stock. Judging by the crash of the stock investors weren't exactly thrilled to learn that $504 thousand in outstanding convertible notes had been exchanged for 10 million preferred G shares. According to the filing the initial conversion price of the Series G shares is just $0.05.

When contemplating whether to put any money into TRKK's stock or not you should use caution. Don't forget that just until recently the company was touted by a paid promotion during which some rather hefty sums got handed around with the newsletter Stock Commander disclosing a $170 thousand compensation for its services. 

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