Arrayit Corp (OTCMKTS:ARYC) Soars Sky-High

If you see a sub-penny stock that can generate over $1.5 million in dollar volume in a matter of a single session, you’ll probably get interested in it. If you see that the sub-penny stock in question has gained a massive 352% in just two days, you might even get a bit excited. Arrayit Corp (OTCMKTS:ARYC) did just that over the last two days, so, chances are, you’re eager to start with your research.

You’ll probably begin with the press release and you’ll find… nothing. The latest announcement came out more than a month ago and it didn’t really have any influence on the stock performance. Then, you’ll check our database and you’ll see that ARYC hasn’t been promoted in over a year and a half which is commendable.

You’ll still be left wondering what might be causing the sudden spike, though, and you’ll open the SEC filings to see if there’s anything positive in there. You’ll be left disappointed because the figures in the Q1 report are absolutely terrible. Here they are:

  • cash: $59 thousand
  • current assets: $723 thousand
  • current liabilities: $8 million
  • quarterly revenues: $787 thousand
  • quarterly net loss: $1.4 million

The financials are quite shocking, you have to agree, and that’s without even considering the fact that the revenues have dropped by a hefty 28% on a year over year basis. And, as is often the case with sub-penny tickers, the convertible debt that has been picked up over the years is now starting to strangle the living daylights out of the share structure.

As we mentioned yesterday, about 7.6 million shares were issued in a matter of 42 days when the company converted some debt at rates that were significantly lower than the then current price. By the looks of things, the dilution has been much more severe since May 12. According to the latest report, about a month ago, the O/S count stood at just over 64 million, but yesterday, in a matter of just six and a half hours, investors traded more than 232 million shares – nearly four times that amount.

So, the stock has gone through heavy dilution, the financial results are dismal, there’s no news, and if you take a closer look at the Legal Proceedings section of the 10-Q, you’ll see that ARYC has been involved in lawsuits, the outcome of which remains unknown. Why, then, did people push the stock from $0.0017 all the way to $0.0077 in a matter of just two days?

That’s a tricky question. The discussion boards are full of people who tell everybody that ARYC is a great stock to own. They also say that if the company releases some news, the ticker is in for some massive gains. They fail to explain, though, why, of all times, they decided to tout ARYC right now, when the stock is starting to feel the strain of the horrific dilution. The same goes for the social networks, and the performance from Wednesday and Thursday shows how powerful these mediums can be when it comes to influencing the market’s attitude towards a penny stock.

If early trading today is anything to go by, however, this alone won’t be enough to sustain ARYC for long. About forty minutes after the opening bell, the ticker is sitting at $0.0059 (more than 23% below yesterday’s close).

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