Yesterday, after a session for LBAS stock marked by the milestone news from Monday evening and by some uncompensated stock promotions, the shares lost even more value than they had gained on Tuesday. The stock dropped 8.70% down to close at $0.21 on a trading volume of 230,000 shares. If on Tuesday the share price looked like aiming the highs above the $0.30 resistance from November last year, now it seems that traders have to look for strong support levels.
The big event behind the action this week was the announcement that Location Based Technologies has received a term loan of $1,000,000 from Silicon Valley Bank, whereby the intentions are to expand the relationship to a $5,000,000 revolving credit facility. The company states also that the funds would be used to support its manufacturing and shipment activities.
Another issue is what benefits that additional cash would bring. The business of LBAS looks highly unprofitable with losses and stockholders’ deficit going in millions and growing at measurable rates in every quarter. Unfortunately, the same cannot be said about the sales of the company, which remained unchanged at the around $5,000 level last year.
It is also interesting that even though the share price of LBAS has been on a constant decline in the last three years, it appears to be still very optimistically priced in relation to the proven facts.
