Georgi Kamburov

Orbital Tracking Corp (OTCBB:TRKK) Wipes More of its Gains

by Georgi Kamburov May 20, 2016

The quarterly report for the first three months of 2016 that Orbital Tracking Corp (OTCBB:TRKK, TRKK message board) filed on Monday really managed to get investors excited. The widespread euphoria that was displayed by the market was enough to push the stock of the company from $0.06 to a high of 36 cents per share in just two sessions.

The financial report showed that TRKK made some solid progress during the quarter with the quarterly revenues growing by 62% from what the company reported a year ago. As of March 31, 2016, TRKK had:

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

Unlike the majority of the other pennystocks TRKK have positive working capital but more importantly they finished the quarter with a positive bottom line of $60 thousand. A truly impressive achievement but in our articles we warned you that there are some rather serious red flags that demand the use of caution.

Taking a look at the chart you will see that immediately following its explosive climb the stock is now rapidly wiping its gains. On Wednesday it crashed by nearly 42% while yesterday it dropped by more than 39%. During the trading day the ticker slipped below 10 cents but right before the closing bell it managed to reverse its direction and as a result finished the session at $0.109.

What could have caused investors to change their sentiment towards the stock so suddenly? Well, you won't have to look far in order to find the answer. Since the start of the year TRKK have issued approximately 5 million fresh common shares as a conversion of various preferred convertible shares. Between December 31, 2015, and May 12, 2016, the number of outstanding shares grew from 19.2 million to 24.8 million. Not only are there millions upon millions of preferred shares that could still be converted but on May 18 TRKK submitted an 8-K filing that revealed yet another series of preferred stock.

According to the filing on May 17 the amount of $504 thousand in convertible notes was exchanged for 10.08 million Series G Convertible Preferred shares. Each Series G share has an initial conversion price of $0.05, which, even after the devastating losses from the past two sessions, is still over 50% lower than the market price.

The fact that until a month ago TRKK was being pumped by a paid promotion doesn't make the situation any better. That is why we always encourage you to do your own due diligence before committing to any trades and to never base your decision solely on hype. 

In early trading today TRKK is down by another 2.75% sitting at $0.106 per share.

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