Propanc Health Group Inc (OTCMKTS:PPCH) Bounces
After suffering through several sessions of sizable losses yesterday the stock of Propanc Health Group Inc (OTCMKTS:PPCH) not only managed to reverse its direction but it did so in a rather impressive way. The company surged upwards right from the opening bell, managed to hold on to its gains and closed exactly 30% in the green at $0.039 per share.
The performance was undoubtedly influenced by the new research report that was issued yesterday. In it SeeThruEquity gave PPCH a 12-month price target of $1.52 per share. Is such a market price even remotely realistic though? Especially when you open the latest quarterly report and see that less than two months ago PPCH had:
• $77 thousand cash
• $300 thousand total current assets
• $3.5 million total current liabilities
• ZERO revenues
• $839 thousand net loss
At the end of September quite a few convertible notes were outstanding with some of them convertible into shares at a 45% discount. As we warned you in our previous article nearly 22 million shares priced at $0.012375 per share and 5 million shares priced even lower at 1 cent per share saw the light of day in the first half of October. PPCH‘s outstanding shares were sitting just below 400 million as of November 13.
On November 10, however, PPCH made a huge announcement – they were able to enter into a $4 million financing with an institutional investor that should be sufficient to keep them going through the next twelve months. In order to receive the money PPCH will issue a convertible debenture with a conversion price of $0.042. While the ticker is currently sitting below that mark if PPCH continue to climb higher the owners of the note could become more and more tempted to start converting it. And having in mind that one of the directors of the institutional investor is none other than Mr. Joshua Sason, the person behind some of the most notorious toxic funders, this could very well be the case.
The hype around PPCH may be enough to keep the stock moving upwards but basing your investment decisions solely on hype is a dangerous move. Take all of the red flags into account and adjust your trades accordingly.
