It seems that the record trading volume of 50.38 million shares on Friday was caused by the announcement that the company has been ranked number 72 on Deloitte’s ranking of the 500 fastest growing companies in North America. The period taken into consideration is between 2005 and 2009. It has not been mentioned if Flint’s ranking has improved, but traders obviously assumed this despite the decreasing at a fast and measurable rate sales over the last four quarters.
The bullish technical signal has been the $0.0054 close of the share price, which is exactly equal to the 50-day moving average of the stock. Though, the upward potential is questionable.
In the beginning of October, the company entered into a merger agreement with two other companies in order to expand its portfolio and gain new markets. Flint has agreed to pay for the acquisition with 600,000 of its convertible preferred stock, half of that amount to be issued on the closing date. It looks like along with the business expansion, Flint shareholders may also get their ownership in the company diluted with the scale of at least a 1-for-4 stock split. Only the first portion of the preferred stock shares can be converted into up to 478 million new shares of common stock at a 25% discount to an average market price estimate at the time of the conversion.
Even if the number of common shares actually rises from 129.82 million to over 608 million, Flint stock appears now low priced for the $34 million in sales for the fiscal year ended this June. Investor despair and the lack of any optimism about the company’s further existence reflected in the share price is not a wonder, however. Flint has as of end-June over 8 times more current liabilities than current assets, and keeps multiplying the losses. In the last fiscal year the net loss doubled and reached nearly $29 million.
