Alkaline Water Company Inc (OTCBB:WTER) is Still Alive and Kicking
A paid pump has not one, but several implications for a company and its stock. For one, as we have seen over the last couple of weeks, the SEC can step in and put an abrupt end to the whole show by placing suspension orders on tickers that have become a target of expensive promotions. Even if they don’t, the share price is bound to suffer. This in itself is a bit of a red flag since potential investors are able to see the huge drops and the extensive history of touting which urges most of them to simply walk away. This is a shame since among the pumped companies, there are a few that aren’t set up with the sole purpose of selling stock. Alkaline Water Company Inc (OTCBB:WTER) appears to be one such entity.
As you probably know, WTER became the target of a rather big promotional campaign that ran between August and October. The budget was $3 million and the pumpers used emails, as well as landing pages and hard mailer leaflets to get investors interested. At the same time, intentionally or not, the company was lending a helping hand by issuing countless press releases informing us about a host of new and exciting events that should paint an extremely bright future for WTER. The effects were predictable. The ticker soared and on September 13, it managed to reach a dazzling 52-week high of no less than $1.30. That’s when things turned ugly.
Three horrific sessions later, WTER was standing below the $0.50 per share mark. Since then, the ticker has been rather hesitant to show any sort of consistent performance. There was another peak in October when the pumpers, apparently not disturbed by the devastating drop, tried to breathe a new lease of life into the stock, but apart from that, the general direction has been down.
And while the promoters were trying to artificially inflate the price, it would appear that the management team has been hard at work getting the business going. As we mentioned in the first paragraph, a vast portion of the promoted small cap ventures fail to start operations at all and their whole existence is centered around a few months of unnecessary hype. WTER, however, filed their Q3 results on November 13 and showed us that they are capable of generating revenues. What’s more, they also have the comfort of a relatively stable working capital and with the latest private placement, they shouldn’t be in a desperate need for cash any time soon.
Here’s how things looked back on September 30:
- cash: $195 thousand
- current assets: $394 thousand
- current liabilities: $97 thousand
- quarterly revenues: $129 thousand
- quarterly net loss: $485 thousand
The really big problem is, quite obviously, the net loss, but even so, you would agree that there are some signs of long term potential. Despite this, WTER continued to slide after the publishing of the 10-Q and just four sessions later, it had dropped below $0.30 per share. With the help of a press release from November 20, it managed to regain some of the lost ground and is now challenging the $0.40 mark. Will it manage to break through it, though?
At the moment, it just seems to unpredictable to say for sure. It would appear that the pumpers have now moved on to other small cap stocks but there can be no guarantees that they will stay away from WTER for good. Violent corrections of 10% or more are not uncommon which is why you should be careful to consider all the options and avoid investing amounts you can not afford to lose.