Yesterday, investors of HUGHES Telematics Inc (OTC:HUTC) stock had one occasion to celebrate and one to be disappointed.
The highest volume traded for the past year and the price topple down almost 15% raised the question if HUTC stock suffers from illiquidity.
The huge HUTC stock demand yesterday was on the background of no news by the company.
The last HUTC announcement was made in the middle of the month. It was related to the extension of the company’s warrant exchange offer from June. Then, HUTC offered investors for a limited time to exchange 20 warrants for one share of common stock.
Usually, such events are rushing companies’ stocks to go green and up. This was not the case with HUTC shares. Even the volume traded was lackadaisical, before and after the offer.
The hard resistance of HUTC stock towards the company’s news was observed also at the beginning of June, when IBM released its intentions to partner with Hughes Telematics Inc. and Daimler AG to develop a new computing technology for cars.
With no bad or good suggestions to the name and the business of the company’s transfer agent “Continental Stock Transfer & Trust Company”, looks like HUTC stock is not a continental and only a trusted asset.
Illiquid asset is a security or other asset that cannot easily be sold or exchanged for cash without a substantial loss in value. Illiquid assets usually cannot be sold quickly because of a lack of ready and willing investors or speculators to purchase the asset. Maybe, it follows the question about the substantial loss in value of HUTC stock, which is the next issue to be discussed.
