After weeks of continuous rise in stock price for Sunvalley Solar,Inc.(OTC:SSOL) the market is now settling down. There have been lots of positive news about the company since the beginning of the year, most of them regarding signed contracts for the installation of solar panels with several companies. They were all covered in stock promotions, as well, which is another reason why the stock has attracted many traders and its price has increased more than 500% since the beginning of the year.
The last contract was announced this Monday, and the last promotion also took place that day. In fact, yesterday`s session started with another upward movement in price, but there were some investors who obviously decided it is time to sell their shares and enjoy the accumulated profits. Naturally, a slight decline took place, as the market closed at $0.024 per share.
The important question remains whether this cool down on the market would last, or another sharp increase in price is to come. Several aspects have to be considered carefully. First of all, contracts are by far the strongest reason for optimism among investors. Sunvalley Solar has been struggling to survive, which among other things, led to dilution of the stock in the past. Now, it has several contracts for more than $4 million, activities for which Sunvalley should start soon. In other words, what was released during the last few weeks means potential revenues of more than $1 million more than the previous year.
Also, lets not forget that it is still January, so there is much time for additional deals to be signed for 2011. As mentioned in the last 10-Q report, of great concern was the ability of the company to obtain additional financing to continue its operations. With the contracts at present, this should not be such a problem anymore. [BANNER]
Of course, not everything suggests a bright and profitable future for Sunvalley Solar. When observing the counter-parties in the contracts, one would notice that they are agricultural companies mostly. Information about them is scarce some of them have one to three employees total yet they sign a contract for more than $1 million. Now, this does not mean that they are not legitimate companies or that deals with them would not be carried out, but it provokes a sense of caution. If everything goes well, the margin between this January and the end of the year can be far above 500%. If not, investors would see what they are used to seeing – more dilution, sharp decline in price and loss of their money.
