Big news does not necessarily lead to big market performance. At least, this seems to be exactly the case with SecureAlert, Inc. (OTC:SCRA). Otherwise, SCRA stock should have skyrocketed.
Two days ago, SCRA officially published what is now its most ambitious press release ever. However, revealing a record number of new business agreements, a whole new corporate strategy, as well as a transition in management did little to give SCRA stock a boost during the corresponding session.
Instead, it hardly gained 9% in value, ultimately clocking in at $0.0925. The latter turned out to be the company’s best score since … Jun. 23. Moreover, the surge was so inconsistent that it only lasted on Jul. 6. In spite of the great interest in SCRA stock yesterday, which is evident from the huge turnover of 5.4 million, the company closed the session going down 0.54% to $0.92 per share.
A glimpse into the facts mentioned in the corporate update indicates that SCRA might have actually reached a milestone. Under the agreements stated above, the company will have to deliver in excess of 5,000 of its proprietary ReliAlert(TM) tracking devices within the forthcoming six-month period. Furthermore, this quantity is likely to double by the end of that period. Provided that the company succeeds in satisfying all purchase orders, it will realize significant revenue growth.
To cope with demand of such scale, SCRA also announced to have negotiated a new capital raise of at least $13,5 million through a mixture of equity and credit line facilities.
Being a provider of wireless monitoring systems and services, SCRA has stuck to a transparent financial policy. Trading at the OTCQB marketplace, the company filed its most recent 10-Q several weeks ago. According to the unaudited balance sheet, SCRA finished the first calendar quarter of 2011 with $0.66 million in cash, working capital deficit of $6 million, as well as a net loss in excess of $2.5 million. At least, there is a strong improvement in the quarterly revenue on an annual basis, i.e $3.9 million accumulated in Q1 of 2011 vs. $3 million as of Mar. 31,2010.
