Medient Studios, Inc. (OTCMKTS:MDNT) Rises from Rock Bottom on Spring Promotions
Medient Studios, Inc. (OTCMKTS:MDNT) looked like a lost cause- until buyers reappeared at the heel of a dizzying drop in the past months. MDNT suddenly gained 50%, not unusual given its rather low price, reaching $0.0033, as around 160 million shares were mopped up, worth above $408,000. Mysteriously, this is the biggest share volume for the company, happening just as the ticker had lost most of its value.
In the past year, MDNT managed to stage a run from 50 cents to nearly $2, and then drop relentlessly, even below the penny levels. The drop continued through the spring of 2014, despite the long list of material updates and PR. Now the biggest mystery is whether MDNT is considered a bargain, and whether there would be enough enthusiasm to lift up the stock to a higher range.
It’s strange that MDNT describes itself as a movie company with long traditions, and yet something is depressing the stock price. The company is currently capped at just above $1 million, with a little more than 661 million shares outstanding, a rather low count compared to other OTC companies with a price below the penny. The free float is not available, and the rapid selling in the past months suggests that holders from the sidelines may be depressing the price.
Still, the very low price of the company might call in buyers eager to participate in the grand return, as double-zero stocks almost always are capable of staging unusual daily runs, even doubling in price. The other positive thing is that MDNT is one of the alternatives to marijuana stocks, which are multiplying among OTC tickers in the past days. As the legalized cannabis sector remains rather flat, or stages worrying crashes, more and more companies with more traditional business models are coming into the spotlight. Tickers like Fresh Healthy Vending International, Inc. (OTCMKTS:VEND) and Sigma Labs, Inc. (OTCMKTS:SGLB) are among the robustly traded alternatives to the MMJ boom.
Still, MDNT has slim financial results, which may explain the movement to almost rock-bottom stock prices. The latest 10-Q for the first quarter of 2014 reveals:
- $29,143 consolidated revenues, down from $1.95 million for Q1 in 2013
- $1.35 million net loss
The vastly different results are explained by a lack of revenues and increased selling and administrative sales. Thus, MDNT clearly does not have a stable business model, but some periods come in with unusually high earnings that may not repeat. Still, MDNT claims it is serious about hiring the experts and planners to build a $40 million film studio. It is unknown how the company might do this, but the plans sound ambitious.
Investors believe it is due time for a return to more normal prices for MDNT, although the low volumes are worrying, as more buyers would be needed to propel a longer run upward. Unfortunately, MDNT had little luck with volumes when it existed as Fairway Properties, Inc. until October 2012.
But there may be another ingredient to the run: an email promotion worth $29,500, with seven emails in May, the latest one from Information Solutions Group, LLC, worth $10,000. The emails started back in April and coincided with robust PR, and the record volumes followed the messages from May 20th and 21st.
So while MDNT may rise on its own merit, keep in mind that there is an artificial component to the stock price, so avoid over-investing, unless you can afford a sudden crash if the promotion slacks off.