After the announcement of the deal between Youku and Warner Bros in late June gave You On Demand Holdings, Inc. (OTC:CBBD) a boost, the price of the stock started dropping.
Yesterday, CBBD took another hit. It closed 5.13% down at $0.074. A huge chunk of shares was sold in the afternoon – 23.5 million, more than 90% of the volume for the whole session.
After the Jun. 28 update, CBBD hasn’t issued any press releases, which may be the reason for the continuing decline of the price. While there hasn’t been any news, the company published its financial report for the second quarter.[BANNER]
The results in it are not very encouraging. CBBD reported $12.5 million in cash and cash equivalents, which would be more than enough to cover its total current liabilities of approximately $6.6 million. However, the cash was provided through equity financing. The result from operations was a $3.5 million loss for the quarter and the net loss attributable to shareholders was $5.5 million.
This explains the equity financing, but it by no means prevents the dilution that comes from it. Since the beginning of 2011 CBBD has issued more than 124 million shares.
Perhaps, the Warner Bros deal will give the next quarterly a better look, but that is only a guess, and until such a report is published the only way for shareholders to know what’s going on will be the company issuing press releases, and it seems to be reluctant to do so.
