VelaTel Global Communications, Inc. (PINK:VELA) is a telecommunications company which has recently announced a number of agreements for operations in the People’s Republic of China (RPC). Despite these developments, the price of VELA stock has been falling the past couple of weeks.
Yesterday, VELA closed down 6.11% at $0.123. The volume was above the average and reached 2.35 million shares.[BANNER]
On Oct. 14 the company announced it had entered into an agreement with a subsidiary of state-owned China Aerospace Science and Technology Group (CASC). Under the agreement, VELA will enter into an exclusive service contract to deliver WBA and related services to CASC and its affiliates.
Neither the announcement, nor the corresponding 8-K form managed to stop the decline of VELA’s price. This could have been due to the poor financial report filed by VELA. According to the 10-Q, the results for Q3 were:
- $115,371 revenue
- $6,889,572 net loss from operations
- $7,227,611 net loss
While the financial situation of VELA is rather grim, telecommunications is still a hot sector, and the recent developments around China could bring some life back to VELA.
However, there are absolutely no guarantees that the company will manage to work through it’s financial troubles. Barring some extraordinary event VELA seems to be in a tight spot, and not very likely to get out of it soon.
