Rock Creek Pharmaceuticals Inc. (OTCMKTS:RCPI) Makes Another Leap
We’ve seen the story hundreds of times. A NASDAQ or NYSE stock falls to the OTC Markets, and investors flock to it. But is that really a good idea in Rock Creek Pharmaceuticals Inc. (OTCMKTS:RCPI)’s case?
As usual with investing, there is no simple answer to the question “is it a good idea to commit to this stock”. Ultimately, investors have to decide that on their own – but here are some facts and logical thoughts to help them on the way.
Many people buy the stock of ex-NASDAQ and ex-NYSE companies in the hope that, while the entity wasn’t up to standards for those exchanges, it could still be better than your average OTC Markets penny stock. Said people need to duly note that this is not necessarily always the case. Why?
Most companies that fail to remain on the NASDAQ and NYSE are entities in dire straits. Either that, or they never belonged there to begin with. Care to guess which type RCPI belonged to, by looking at its financials?
- cash – $146 thousand
- current assets – $996 thousand
- current liabilities – $11.18 million
- revenues – ZERO
- net loss – $2.84 million
These numbers seem mediocre even by the exceedingly low standards of the OTC Markets. In fact, if an investor was looking at just them and didn’t know about the company’s history, he’d probably not be able to guess that said stock had ever been traded on the NASDAQ.
That seems to be the most RCPI can do in terms of creating investor value, folks. Need we say more on the matter?
The only thing that’s really left to say is that RCPI‘s current volatility presents investors with an opportunity for profit. However, said investors would do well to note that the ticker registers relatively small dollar volumes, even when it is most active. Opportunistic traders should note that fact and act accordingly.
