How Low Can Cardinal Resources Inc. (OTCMKTS:CDNL) Fall?

Cardinal Resources Inc. (OTCMKTS:CDNL) took another step down in yesterday’s trading – so how low can its new found downward momentum carry it?

Once some due diligence on CDNL is done, it quickly becomes obvious that the answer to that question is “quite low indeed” – and the reasons for that are many and varied.

First off, there could be no denying the fact that the only reason for CDNL‘s most recent ascent that very nearly took the ticker above the two cent mark can be found in the company’s recent filings and announcements. Those boldly proclaimed that CDNL has finally gotten its hand on some serious funding – which is good news, for obvious reasons.

This news was taken and made into a rallying cry that in turn caused a wave of hype that managed to push the ticker upward – but as we all know, hype tends not to last.

That fact, in and of itself, did not bode well for the ticker’s chance of retaining its ground – and neither did the fact that we can’t actually know what sort of balance sheet the newly acquired funds will reinforce, since CDNL hasn’t bothered filing its latest financial report.

This is a big deal, since as it stands, next to nothing is known about CDNL‘s current state. Well, except that about five weeks ago, the company had at least 510 MILLION shares of commons stock issued and outstanding. Investors are advised to note that this number was less than 97 million about a year ago.

Then again, when you think about it, it is only natural that the company’s SO would explode like that, in light of its tendency to issue toxic convertible notes. Case in point – back in September, there were approximately $500 thousand worth of notes convertible into shares of CDNL stock at discounts varying between 25% and 50%.

That’s another thing for investors to consider – who knows how much more toxic debt the company has taken on since it last reported?

We don’t know, and won’t know for certain until CDNL files its annual report for the fiscal 2015.

Until it does so, CDNL hype and doubt will continue to pull the ticker every which way, ensuring that it will remain nothing short of a blind gamble.