Pumpers Throw a Spanner in Abby Inc (OTCMKTS:ABBY)’s Wheels
Abby Inc (OTCMKTS:ABBY) came up with some good news shortly before the end of last Thursday’s session. They said that everything is on schedule around the acquisition of a majority interest in The Evans Corporation.
The deal was first announced three and a half months ago and seeing that the company is actually managing to keep up with its deadlines is a good (and somewhat rare) thing in Pennyland. What’s more, investors who have done some research on The Evans Corporation might be happy about what they have found. The future majority-owned subsidiary is in the car brokerage business and, judging by the reviews around the internet, they do have some happy customers to brag about.
Evans is a private company which means that we have no idea what its financial situation is. The chances of it being worse than ABBY‘s, however, are slim. Here’s what ABBY recorded at the end of last year:
- cash: $1,265
- current assets: $4,518
- current liabilities: $383,699
- yearly revenues: $24,107
- yearly net loss: $1,489,674
As you can see, ABBY‘s financials are quite catastrophic, even by the low Pennyland standards. The fact that the stock finished Friday’s session with over $200 thousand in dollar volume, however, goes to show that many investors are hoping for some better results when The Evans Corporation is on board.
Whether their hopes will be realized is for the future to tell, but in the meantime, we must point out that despite the good news, ABBY refused to move in the right direction. In fact, it wiped out more than a third of its value and it closed Friday’s session at $0.15 per share. Things aren’t looking much better today. A few minutes after the opening bell, ABBY is sitting at just $0.08 – a further 46% down.
Finding the most likely culprit for the truly appalling performance is not that difficult – ABBY is being pumped. The promotion started after May 7’s closing bell and since then, Momentum OTC and their affiliated newsletters have sent out more than ten email alerts in exchange for $11,500. People who have been around penny stocks for long enough know that promoted OTC tickers are extremely dangerous and ABBY‘s free fall proves the point rather well.
Experienced investors also know that when researching a company, it’s always good to take a look at the older press releases and see how the forward-looking statements have affected the balance sheet. In ABBY‘s case, if you search hard, you’ll find out that in Q4 of 2013, they were preparing themselves for what they called the Trucks & Tatas Tour – a food truck tour that was supposed to attract the adult audience in seven US cities. We don’t know whether the tour took place, but we do know that 2014, with its $24 thousand in revenues, wasn’t a particularly successful year.
Last but not least, experienced investors always take a look at the share structure and check to see how bad the dilution is. Unfortunately, in ABBY‘s case, some more bad news pops up. The company executed a 1 for 150 reverse split on September 15, 2014 which brought the O/S count down to just over 2 million at the end of Q3 of last year. Three months later, it was already sitting at more than 49 million.
