In the last two trading sessions the stock of Micro Imaging Technology, Inc. (PINK:MMTC) more than tripled its value, setting also a new volume record yesterday. Unfortunately, the gains of the pink sheets company on the stock market had no fundamental backup, and were probably due to the intense shorting of the stock in the preceding couple of sessions.
Yesterday, MMTC closed the market with another 104.56% gain from Friday close. Thus, MMTC shares are worth $0.009 each as of yesterday, resulting from the over 115 million traded shares: the new highest trading volume of MMTC for the past three years. Unlike the previous jumps of that kind back in July, this time there is no official news, only shorting.
More than 50% of the total trading volume of MMTC during Friday session has been reported as short sales, that percentage being almost 35 for yesterday’s session and almost 29 for the session last Thursday. The company’s last known number of outstanding shares of common stock is about 262 million (as of June 10, 2011), though as MMTC has recently shown huge potential to dilute its shareholders it is likely that the number could be substantially higher up to date. The exact public float is also unknown.
From a technical point of view, MMTC looks like it could surge further today, where the resistance from yesterday is $0.013. Though, as of end-April 2011 the company had minor assets and large outstanding convertible notes and loans. Thus, without any working business model, the future of MMTC seems strongly under question.
According to MMTC latest 10-Q, its outstanding convertible debentures as of end-April this year are only one of the potential sources of dilution. They are convertible into shares of common stock at a discount of 39% or 42% to the average of the lowest three closing bid prices of the stock during the ten trading days prior to the conversion date. The company had in April 42 million shares reserved for issuance upon conversion. In the preceding six months, MMTC had issued another 42 million common shares upon the conversion of similar debentures.
