Artec Global Media Inc (OTCBB:ACTL) Stirred Up by Message Board Hype

Artec Global Media Inc (OTCBB:ACTL) went through three extremely exciting sessions at the beginning of the week. Although it failed to reach a green close on Monday, the increased volume suggested that it’s ready to move. Indeed it was.

Tuesday saw it more than double its value while registering an even higher volume and yesterday, in a similar move, it added another 110% which means that it reached its highest close in just over two months – $0.0145 per share.

Unfortunately, the reason for all this is… meaningless hype. Despite the fact that the company hasn’t put out any significant filings or press releases lately, people roaming the message boards and social networks seem to be extremely excited about the future. Capital letters and exclamation marks have been excessively abused over the last few days and even some of the promotional newsletters like Aim High Profits are also touting the ticker. Compensations haven’t been disclosed.

Predictably, neither the people with the capital letters, nor the pump outfits say anything about the financials. As always, we’ll take care of that instead of them. Here’s what ACTL had at the end of July:

  • cash: $7,193
  • total assets: $9,967
  • current liabilities: $190,746
  • quarterly revenues: $61,224
  • quarterly net loss: $151,609

The 10-Q is not much to shout about, you have to agree, and, naturally enough, ACTL‘s supporters aren’t paying too much attention to it. They are focusing instead on the share structure and it must be said that, as far as the figures in the SEC filings are concerned, ACTL does look better than the majority of its OTC counterparts in that respect. On September 10, for example, there were just 10.2 million shares issued and outstanding which, considering the share price, isn’t that much.

There was also quite a lot of toxic debt, though. Plenty of convertible notes saw the light of day between October 2014 and June 2015 and the company still seems to be borrowing money under these agreements. As always, the notes in question can be turned into common stock at discounts that, in this particular case, range from 35% to 42%. This seems to be causing a problem.

The fact that in a matter of three days investors traded more than 20 million shares suggest that the O/S count might have grown over the last few weeks. The number of authorized shares was increased recently from 75 million to 750 million which might also serve as a hint at potential dilution in the near future.

We don’t know whether that has anything to do with it, but about an hour and a half after today’s opening bell, ACTL is sitting at $0.0083 – 42% below yesterday’s close.

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