If you traded with shares of Microelectronics Technology Co. (PINK:MELY) yesterday hoping to take advantage of the full-on paid promotion, you must be bitterly disappointed with the effort’s outcome. Unless you were lucky enough to buy MELY stock at the open at $0.40 and sell it at the intraday high of $0.45 per share.
Although promoters did their best to pump MELY during the latest trading session yesterday, the success they met with was so short-lived that it took most traders aback. In the end, MELY closed at $0.37, down 5% from its Tuesday close, shifting a volume of approx. 70 thousand. The latter marked a seven-fold improvement over the company’s average daily trading volume.
Apart from the $10-thousand promotional effort mentioned above, a brand-new press release also seems to have caused such a trading frenzy. As it is, the company issued an update to announce the completion of the first round of financing totalling $240 thousand to be used for buying equipment, servers and software development.
In the light of the company’s dire financial condition, any additional funding is a welcome opportunity. To raise potential capital, however, the company’s managers have to provide certain guarantees to prospective creditors. Unfortunately, as of now, they seem to hold no trump cards: the company has no cash reserves, its working capital gap has widened by 49% for the trailing 12 months and it has incurred an average net loss of $31.25 thousand per quarter for the 2011 fiscal year. To make matters worse, MELY’s managers have not invested a single cent in R & D for the last 12 months, yet they have spent $125 thousand on administrative expenses.
Anyway, if the company’s managers succeed in promoting the advantages of the Sproq next generation cloud computing application hosting, they could stand a chance of securing the funding they need to keep to the plan and launch the application within the next couple of months.
