Yesterday, American Diversified Holdings Corp. (PINK:ADHC) gapped up at market open in a continuation of the intensive trading that started shortly before market close on Friday. The reason were not the usual promotion this time. ADHC announced to have finally completed the acquisition of a cloud computing company.
ADHC closed yesterday at $0.004, 42.86% up from the previous close, the trading volume reaching 64.24 million shares. Intraday chart shows that ADHC started accumulating strong volume already shortly before market close on Friday. Yesterday, the stock was then mentioned as a “Percentage Gainer” in a stock promoting website’s midday update at exactly 12:11, the previous promo e-mail for ADHC being sent on May 20, 2011.
The compensation disclosure of the newsletter states that two stock promoting companies that operate several website have received a $240,000 compensation from a non-affiliated third party shareholder of AHDC. It looks like yesterday’s alert is part of a huge promotional campaign that the stock has been enjoying for months now, run by those two promoters.
Yet, the reason why ADHC gapped up in such a way seems this time other than promotions. On Friday afternoon, the company announced that it has completed the acquisition of a cloud computing company called Rebel Networks. As the industry is very popular right now, and as ADHC had previous issued a number of press releases to advertise the acquisition, the immediate reaction on the market was to be expected.
American Diversified Holdings latest quarter report was published on the OTC Market page on Thursday last week. According to its, ADHC plans to develop a mobile software platform that would collect, analyze and present medical data for the healthcare market. Unfortunately, ADHC does not have a lot of financial resources with only around $50,000 in cash as of April 30, 2011 and $125,000 in current liabilities. Also, there was on that date an outstanding loan in the amount of over $574,000, made to the company by its CEO Ernest Remo.
