Shares of Raystream Inc (OTC:RAYS) are only traded once in a blue moon. Yet, it is more than enough to take investors by surprise.
Following a three-week hiatus, RAYS returned to the stock market with a bang. Yesterday, the value of RAYS shares skyrocketed 41%, eventually closing the session at $1.41 per share. The volume also went crazy as more than 5 million outstanding shares changed hands, marking an all-time high for the company. Given that RAYS stock was only traded three times for the last 52 weeks, these records did not need much outside effort to materialize.
RAYS’s spectacular performance seems to have raised third parties’ attention since promoters wasted no time to spread the word about the huge momentum which started yesterday. While all newsletters that have reached our database are nothing short of free alerts, a paid promotion scenario is not to be fully neglected.
Raystream Inc. pretends to have developed a proprietary video compression technology. The latter is supposed to be able to reduce the size of HD videos by up to 90% without affecting their quality and clarity. Thus, high-quality video clips can reach a much wider range of Internet users. Given that an ever growing number of consumers watches online video, RAYS might have found itself in a fairly lucrative market niche.
Traded on the OTCBB, RAYS is a regular SEC filer. In compliance with its reporting obligations, the development-stage company recently submitted a thorough 10-Q report covering the quarter ended Jul. 31, 2011, i.e the first quarter of its fiscal year. According to the document, RAYS finished the quarter with:
- cash reserves and current assets of approx. $2 million;
- $30K in current liabilities;
- $2 million in debenture payable;
- zero revenue and a net loss of $34 thousand.
As much as the company’s business appears to be of high-potential, it has yet to start generating revenue. Unless RAYS starts generating cash flows soon, it will most probably fall below the $1 benchmark, to the detriment of its stockholders.
