The stock ended last session at $1.55, gaining 6% from the previous close. More impressive here was the trading volume of 3.63M shares, as it exceeds seven times the average for the company. This is also a record in the company’s trading history. It looks like investors finally showed somewhat bigger interest towards Tuscany. As a result, the stock was so much demanded on the TSE.
The shares, not surprisingly so, were in a retreat after setting an all-time high of $2.16 in the beginning of this month. Since Mar. 4, TID has lost 27% of its value. Now, it seems the negative trend has probably come to an end.
Has it? Judging by the financial condition of the company, the fall should have stopped indeed. Tuscany looks fundamentally stable. See this yourself:
- In the end of last year, the company had $48M in cash and a positive working capital of $41.5M;
- Tuscany recorded revenue of $19.4M from Oilfield services in 2010. In 2009, the earnings were just $2.98M;
Almost forgot mentioning that the figures above do not include the $115M bought-deal financing announced only three days ago. The funds raised from the offering will be used for the acquisition of a private Brazilian drilling company and nine drilling rigs, estimated to cost about $52M.
A more careful analysis, however, might reveal the presence of some negative data contained in the financial statements:
- Tuscany had a huge long-term debt of $70.7M in the end of 2010 and total liabilities are over $90M;
- The company reported a large net loss of $19.7M for 2010, a 676% increase over the loss recorded in 2009;
- Too much share dilution: the number of the total outstanding shares has almost tripled from $73.2M in the end of 2009 to $197M at present – a jump of 169%.
Finally, it is worth noting that Tuscany might profit from the rise in the oil prices triggered by the political unrest in Libya.
