On Friday Onstream Media’s stock profited further from Thursday’s press release and surged 40.59% up to close at $1.42 for a share. The trading volume exploded with over 900,000 shares traded, more than eight time the previous day’s volume. The closing price was also far above the 50-day moving average of $1.12. A further good signal is that the demand seems growing and the shares are about to become overbought.
Though, apart from last week’s press release about the launch of the MarketPlace365 virtual tradeshow platform with SUBWAY, some other events around Onstream Media have not been that favorable.
In June, after Mr. Robert J. Wussler, a director and a member of Onstream’s audit committee, passed away, it was announced that the company may get delisted from the NASDAQ stock exchange because of non-compliance with the listing rule which requires that the audit committee of the company have at least three members, each of whom is independent and meets certain other specified criteria. Though, the company still has time until the next annual meeting of its shareholders to solve that issue.
Currently, ONSM stock does not seem like it belongs to investor’s favorites, since their expectations about the future sales and value of the company appear pessimistic. It looks like the recent press releases cannot so quickly offset the impact of the disappointing this year’s first quarter results:
- Working capital deficit of $2.6 million
- Total revenue decline of 5.6%
- Only losses since inception in 1993
- Negative cash flow from operations of nearly $356,000 as compared to a positive value of $350,000 for the same period last year
The 1-for-6 reverse stock split from April also provided only for some short-term appreciation, as it seems that there are heavy dilution risks along with the bad financials. End of March the company had $1.3 million long-term debt, consisting of convertible debentures, notes payable and capitalized lease obligations.
