China Kangtai Cactus Bio-Tech Inc. (OTC:CKGT) closed at $0.78 that day. After that, the price hit new lows. On Friday, however, after the company came out with a PR, it bounced 19.7% up and closed at $0.79 on approximately 220 thousand traded shares. The company announced it was planning to release its fully audited financial results for 2010 on Mar. 31.
There is a strong possibility the steep fall was triggered by the halt of CCME trade by the NASDAQ, as suggested in this and many other posts. In the case of CKGT, the response of the company obviously had a positive effect and managed to bring confidence in the stock.[BANNER]
As a number of other small cap Chinese companies, CKGT took a significant hit. This was only logical with the CCME halt. If a Chinese company traded on a higher tier is halted and there is doubt about its legitimacy, there is certainly a chance that a reportedly profitable small cap OTC tier company will suffer some price devaluation.
Even before the halt, there might have been some doubt about how much of the financial results reported by CKGT are true. With reported $43 million in assets and $2.9 in total liabilities, a market cap of approximately $20 million is not exactly screaming “trust”.
If the company indeed provides fully audited financial results on Mar. 31, that would potentially dispel any doubts, provided there aren’t any inconsistencies with what has been released before. Until then, however, there is a lot of room for speculation.
