More than 1.2 million shares of Value Vision were traded yesterday and the stock jumped by 39.75% up to close at $2.25 for a share. It seems now more probable that the share price may finally determine its future direction of move as investors got really excited about the announced fiscal second quarter results. Although the official 10-Q has not been made yet, it seems that the last three months ended July this year have been a success for the multi-media retailer and the investor can for a while forget about the coming dilution.
VVTV price bounced far above its upper trading band and broke all resistance back to the middle of June. On a quarterly basis and year-over-year, the company managed to grow its sales through reducing the average selling price. Gross margin also increased, but the net loss improvement of only 6.10% seems modest. In addition,Value Vision announced some changes in its management. Among other new appointments, Mr. William J. McGrath is the new Senior Vice President and CFO, while Ms. Kris Kulesza is resigning from the position Senior Vice President of Merchandising and the company does not plan currently to fill that position.
In compliance with the 31% decline in the working capital available for operations, Value Vision declared end of last months its plans to raise additional cash. It seems that this initiative will be highly dilutive for the company’s current shareholders and their expectations can be noticed on the stock chart. According to a securities registration statement filed with the SEC at the end of July and then supplemented last Tuesday, a still undetermined number of securities will be offered for sale in the future.
The total amount to be raised is up to $75 million and the type of securities include common stock, convertible preferred stock, warrants, stock purchase contracts, rights, or a combination of all these in the form of units.
