When you think of OTC Pink tier companies, record revenues don’t always sound impressive. How about $118 million? Add the $2.6 million net income. Then look at the price. Why on Earth would a profitable company trade so low?
We will get to that later. Yesterday, NewMarket Technology, Inc. (PINK:NWMT) moved 42.86% up – back to the recent high of $0.001. The volume was slightly lower than the record 179 million, reaching 172 million. This happened after yet another PR claiming millions of dollars in revenue for 2010.
There is no current information about the share structure of the company, not such that would explain what is happening anyway. The latest information is from the 10-K, which states issued and outstanding shares of approximately 11 million.
If we assume the company has issued all 2 billion authorized shares, at yesterday’s price that would still make NWMT a $2 million market cap company. A possible reason for the hesitant market reaction is the history of the company.[BANNER]
Two reverse splits in two consecutive years can seriously hurt a stock’s appeal. The last reverse split was a 1 for 200, which left the OS at the aforementioned 11 million, and which had it’s pay date on December 27, 2010. Just a few months later – 179 million traded in a day, make what you want of it.
Running a company into the triple zeros can get some shareholders really unhappy. It might take something more substantial and credible than tons of PRs to make NWMT move significantly higher, or at least reach the pre-reverse levels.
