Vecta Energy Corp. (CVE:VER) (PINK:VCTEF) share price continues to collapse since the company announced last week they were going out of business.
VER collapsed another 14.3% on Friday following a preceding, even larger, price crash. The stock lost more than 68% in just two days and it is very likely to continue going down.
The company said on September 1, 2011 they are reviewing strategic alternatives that would allow maximizing shareholder value. Vecta is looking at possibilities to sell material assets or the whole company as well as searches for possible merger, farm-out or joint venture opportunities.
In other words the business is finished and they are looking for ways to avoid bankruptcy. Most of shareholders willing to take their loss have already jumped the ship but that doesn’t mean the decline in share price will stop.
The company still holds a market cap of $2.2 million. That’s way too much for a corporation with a net tangible worth of negative $62 thousand and obviously going out of business. Vecta can cover 38% of short term debts with the working capital on hand but the remaining part will have to come from a sale of assets and right now it seem that shareholders aren’t likely to get much of the proceeds.
On the brighter side, the maturity date of the secured loans has been extended to November 30, 2011 thus the management has three more months to come up with a plan.
