This weekend, Viaspace Inc. (OTC:VSPC) was featured in a promotional letter, which means that the coming session might be more active than usual. Apparently, these days VSPC had resolved to a market awareness campaign with the hope to bring more attention to the company and its operations.
The campaign was initiated by Stock Guru, who admitted that he was compensated $2,200 and $1 million restricted shares for the service. Given the current price of VSPC shares of $0.0125, the share compensation equals roughly $12 thousand dollars. Unfortunately, Pentony Enterprises, which is the owner of Stock Guru, does not specify the period of the market awareness contract. [BANNER]
Viaspace is a green technology company producing biofuels and fuel cell cartridges. The started market awareness campaign focuses on the Giant King Grass, which the company is growing in a property in China for demonstration purposes.
The company has several red flags in its finances. First, a major part of the assets and revenues is derived from outside of its main operations. For example, $3 million of the reported revenues come from sales of artwork instead of its focal products; $1.3 million of receivables are also from related parties. On the whole, VSPC had finished 2010 with a $800 thousand negative cash flow despite the reported millions in revenues.
For two months VSPC has been in a downtrend with major indicators bolstering the direction. However, at the end of last week some trending indicators like the 9-day MA and MACD slowed the downward temp and actually turned neutral. At the same time, the stock exited the oversold area on Thursday, which could have been the positive signal that gave VSPC an impetus to rise 11% on a 1.4 million volume.
For now, it seems that VSPC is at a technical threshold which makes it an interesting venue for speculations for short-term traders. However, it seems that VSPC will need to put much more efforts in building its fundamental base for the long run.
