Last Friday, the
stock of American Petro-Hunter Inc.(
OTC:AAPH) got attention far beyond the average from investors as 820k shares were traded. Nevertheless, the price remained almost the same, the session opening at $0.315 and closing at $0.32 per share. The source for this activity was a stock promotion, which among other things mentioned some predictions about a $1 share price soon to come. Not surprisingly, this sparkled vivid activity on the market, but it is arguable whether the end purpose was met.
As the name suggests, American Petro-Hunter Inc. is a company with main line of business the exploration and development of reserves in the US for the production of oil and gas. The company has several projects in the country, but is still struggling to achieve its short- and long-term goals. This natu
rally has its reflection on the stock market, as high
volatility is what determines the company share price since it was first introduced to the market.
Investors among other things are usually very concerned about the financial status of the company. In the case of American Petro-Hunter, it is far from promising, at least if considering the last 10-Q report covering the first three quarters of 2010. Key figures in it indicated that as of Sept. 2010 the company had:
- cash of $3.3 thousand and working capital deficiency of $2.4 million
- a comprehensive loss of $2 million for the first three quarters
- an accumulated deficit of $7.5 million
It is important to mention that the company is still in the development stage, thus minimal revenue from current operations is obtained. Again, according to the 10-Q report, to generate revenue management intends to focus activities on the development of their current natural resource projects.[BANNER]
Which sounds good, but it is what the company has been doing much of the time so far, yet the profits are still to come. It is no surprise then that there is no stability for the stock price as it is not influenced by realized profits, but by announcements and plans for future developments. And while the latter might bring revenues to the speculative trader, given the volatility of the stock it is also as likely to chase away all long-term investors that are not less important. All in all, it is a future of uncertainty for the company lying ahead, as plans have not yet turned into projects, sales and ultimately into the much needed profits.
