The usually low-liquidity Autobytel, Inc. (NASDAQ:ABTL) stock demonstrated over the past year that it gets rarely actively traded and for some mysterious reasons. Yesterday’s sudden volume and price jumps came again quite surprising and on no news released by the company.
It seems that it is currently only the expectations about the second quarter results, to be released after the market closes next Thursday, that causes the market excitement. Autobytel’s stock gained yesterday 6.8% on more than four times the average trading volume and closed the market at $1.10 for a share.
Interestingly, it looks like investors need to get alerted in order to have a sustained interest in ABTL stock. The previous, and much larger, increases in the trading activity happened at the beginning of May, long after the first quarter results were filed and again with no relevant news at that time. Noticing the sudden interest for the stock, a stock promoting website sent out alerts, mentioning the fact that ABTL had broken up its upper price range and managed to keep the activity high for a while.
The latest significant events for Autobytel happened in June. Then, the company announced in a press release the launch of a new car buying service for consumers, who receive financing from their local credit union or bank. A couple of days before that, the annual shareholder meeting had approved the company’s Equity Incentive Plan, under which a total number of 6.7 million news shares may be issued.
The total effect on the stock was a short-term stabilization and a following decline. With 45.16 millions shares outstanding, the dilution risks are substantial, but will depend on the terms upon which the stock options will be granted and it seems the market did not consider that risks to be near-term.
Autobytel’s first quarter of the year appears to have been successful. Although the revenues stably declined, the company managed to drive the costs of revenues down and reported a net income instead of the net losses from the previous three quarters. Further, Autobytel still has no debt and is well financed to continue improving the operations, which generated a positive cash flow over the first three months of the year.
