The price of China Education Alliance stock added another 3.23% yesterday and closed at $4.15, or slightly below the highest value reached throughout the day. Along with the announced second quarter results, there seem to be however other factors, which are also affecting the price and the growing demand for the stock this week. Yesterday the trading volume reached over 256,000.
The usual promotional disclosure for the stock was made, suggesting that CEU and its investors have again received some promoting attention. Like in the second half of last year, China Educational Alliance continues engaging a famous IR firm to improve investor awareness for the stock. The company is paying a monthly fee of $6,500 and has also delivered to the promoters 70,000 restricted shares. The promoting services include among other things the preparation of an equity research report and the distribution of advertising materials about the company and its stock.
This year, investors did not seem like they trusted the paid research coverage that much, though yesterday two factors came together and the stock looked like it could finally end up its recent sideways moves and its long-term downtrend. Certain technical indicators were improved, including the MACD fast and slow lines being about to cross the centerline and the climbing up RSI. The expanded trading range is also a positive signal for the market.
The filed on Tuesday second quarter results were not really shockingly good, but brought optimism to the market. Positive is that the previous frequent dilution could be stopped for now, as by the end of June there were no more warrants outstanding, only a minor number of 442,670 stock options. Revenues and earnings improved year-over-year, though got worse on a quarter basis due to higher costs.
The most recent acquisition that was supposed to expand China Educational Alliance platform, focusing on the advancement of science and mathematics education, had only minimal operating activities so far. There is also no progress on a previous and still uncompleted acquisition of a Canadian company from 2008, with which China Educational Alliance planned to offer English training programs.
