Global Future City (OTCMKTS:FTCY) Hits the Ground Running
Global Future City (OTCMKTS:FTCY) has been climbing the charts for quite a while, but last week it really took off. Between May 18 and May 26, it logged six consecutive green sessions and ran from less than $1.20 per share all the way to just under $2.10. In light of this, the 1.9% slip from yesterday probably isn’t that much of a surprise.
The stock is currently sitting at $2.05 per share which might seem a bit steep for some people, but the $238 thousand dollar volume from yesterday shows that a lot of investors are ready to pay this sort of price. But what are they buying exactly?
FTCY recently went through a name change and with it came a few new business initiatives. They will try to develop a real estate project which should provide foreign investors with permanent residence, but they also want to make a name for themselves with a new type of crypto asset called E-Gold.
The word “crypto” has probably sent shivers down the spines of some investors. Last year, the crypto currency business was among the hottest sectors in Pennyland, and predictably, many OTC companies tried to get investors all fired up by entering it. Bitcoin Shop Inc (OTCMKTS:BTCS) was one of the first ones and the hype initially pushed the stock to a high of over $4 per share. Right now, it’s barely handing on to $0.22.
Still, that doesn’t necessarily mean that FTCY is about to fail. For one, if the latest 10-Q is anything to go by, the newly born crypto currency company might have a better chance of survival. Here’s what the figures looked like at the end of Q1:
- cash: $3,106,815
- current assets: $3,129,673
- current liabilities: $2,057,321
- no quarterly revenues
- quarterly operating expenses: $140,742
They did have some money in the bank at the end of Q1 and if the recently announced public offering is successful, they might have quite a bit more in the near future. Unfortunately, even this can not be a guarantee for success. Especially when you consider FTCY‘s history which is full of failures.
Under their previous name, for example, they were trying to manufacture and sell energy shots. They were generating revenues, but in Q4 of 2013, they lost their sales staff because of lack of money. An entity called Greenome initially agreed to provide some funding, but the transaction was never finalized.
As you can see, they now have some cash, but the torn contracts might be coming back to haunt them. On May 12, when retail investors were paying nearly $1.20 per share for FTCY‘s stock, the company converted $150 thousand worth of debt owed to Greenome into 2 million shares (a conversion rate of $0.075 per share). FTCY is no longer indebted to Greenome, but there are some convertible notes still outstanding and at least one of them can be turned into common stock at a 42% discount.
How this will affect the stock performance is for time to tell. Treading carefully, however, might not be a bad call.