On Wednesday Medipattern Corp. (CVE:MKI) (PINK:MKIFF) lost nearly all of its unprovoked gains from the day earlier, promising no breakout any time soon.
MKI share price corrected down a total of 19% during the last session. The increase in price volatility under a heavy trading volume gave off a feeling that traders are checking out if the price could start climbing up after a short consolidation period lasting since the beginning of December.
Medipattern had no news since publishing financial reports in December 2011. Apparently these financial results were satisfying enough to cause such an effect although the stock doesn’t really look undervalued right now.
Under the current share price MKI holds a market cap of $9.8 million. That is a rather optimistic valuation for a company with negative $4 million in book value and minuscule revenues.
Thus far the company successfully covered their losses by using non-cash operating assets such as short-term investments and recoverable tax credits. However, their cash position is bad enough to forecast an upcoming funding round and that will surely bring about changes to their share price. The company doesn’t use sale of capital stock though, so their choice might include more investors friendly solutions such as sale of debt or a bank loan.
