Advanced Environmental Recycling Tech. (OTC:AERT) lost nearly half the share price value over the last trading session, for no apparent reason.
The price action points to a large amount of shares being sold, though the reasons or the sellers themselves remain a mystery. With so much negative impact on the stock price, there’s pressure for the company to address this in a press release. It is, however, its choice whether to do that.
The most reasonable explanation suggests some institutional investor got rid of the shares after evaluating the latest quarterly report. It was announced more than a week ago, along with AERT competitor’s Trex Co. Inc. (NYSE:TREX) announcement of advances in its LED technology last week.
Advanced Environmental Recycling states in its third quarter report that it has limited additional financial resources and struggles to get extensions on the current loans. Additional funds, however, are currently essential if the company wants to avoid problems with the maturities of its debts and obligations.[BANNER]
The company has not avoided stock dilution in the past, but kept it at reasonable levels. Its plans continue to avoid debt or equity funding, but viable alternatives have not yet been found. The current attempts to resolve liquidity issues incorporate cost reductions, implementation of new product sales and expansion of the current product distribution.
The collapsed stock price brought AERT market cap down to $7.5 million. This value appears very low compared to the overall numbers in the annual sales, but has some merit considering the company is not profitable and holds a $9.9 million shareholders’ deficit. Moreover, sales have declined 18% in the third quarter compared to the same period in 2009. All these facts force to question the possibility of a stock price recovery.
