A little more than a year ago, American Diversified Holdings Corp.(PINK:ADHC) was doing just fine, its stock accumulating value, heading for the psychologically important $1 price. Then came 2010. Yet again, promotions and company announcements will try to break another limit, only this time, much less appealing. This March, it is to see whether ADHC can climb to $0.01 again. The good news is that at least the company stock is subject to high interest from investors lately. Speaking of good news, they often tend to get covered in promotions, as well. This week, it is the Letter of Intent about acquiring a cloud computing company, simultaneously announced and covered in promotions; thus, sparkling trading frenzy yesterday, ending with a 32% increase in the stock price. So, where is the stock heading this week? 
To answer this question, one should first know what ADHC does. In essence, this is a software company with main target – to enter the Mobile Health Care Market. Simply put, to offer an application for iPhone,Android etc that not only serves for medical records, but helps for patient monitoring and information. An interesting idea which it seems that Ernest B. Remo, the CEO of the company is indeed set to put into practice, thus the LOI for acquisition this month. The other party in this letter is Rebel Neworks, which Mr.Remo claims could offer the necessary platform to launch and manage ADHC applications from.
Now, a question that probably passed by traders yesterday is – what would be the cost of the acquisition and does ADHC has the cash to go through with the deal? While the first is not mentioned, everyone can take a look at the financials. [BANNER]
Unfortunately, the last figures presented are those with period ending October 31st. According to them, the company had $314 at that point in cash. The accumulated deficit and liabilities, however, are in the millions. It is still possible to use company shares instead of cash, but ADHC has been doing it for a long time now, and it is not always in the best interest of shareholders. Remember the crash from $0.7 to $0.003!
It is true that American Diversified Holdings is not quite the best performing company, in fact, much doubt is associated with its future. But keep also in mind that if the acquisition in question is complete ADHC would have acquired a company, voted the 7th fastest growing hosting enterprise in 2007 by HostReview. And this is a serious point in favour of the potential for development of American Diversified Holdings.
Until then, however, it is only for short speculative traders to enjoy the movement of the stock on the market. The future for AHDC remains as uncertain as it always has been, and since the hype created by promotions yesterday is probably over, it is hard to predict whether the stock will go up a bit more in price, or sit on its sub-penny levels again.
