Terra Tech Corp (OTCBB:TRTC) Sinking Without The Pumpers’ Help
At the beginning of January, Terra Tech Corp (OTCBB:TRTC)’s stock was hovering around $0.47. Yesterday, after losing 7% of its value in six and a half hours of trading, it closed the session at just over $0.07. If you are one of the unlucky investors who jumped in while TRTC was still close to the half a dollar mark, you are currently looking at around 85% in losses. But who is to blame?
As we have mentioned numerous times, the paid promoters have certainly played their role. The ticker has been tormented by all sorts of pumpers, receiving some tasty compensations and they have all tried to convince traders that investing in TRTC is really worthwhile. To a large extent, they have succeeded. You can see from the chart that interest in the ticker has been revived numerous times over the last ten months, but unfortunately, the effects on the price were anything but positive.
The pumpers have been keeping quiet for a while now, but, much to the shareholders’ disappointment, even in their absence, TRTC is still reluctant to show any sort of consistent growth. The latest peak that the ticker displayed was seen during the third week of August when the company published the results for the second quarter of 2013. We’ve put a summary of the most important figures below in case you’ve missed the report:
- cash: $169 thousand
- current assets: $1 million
- current liabilities: $4.3 million
- quarterly revenue: $665 thousand
- quarterly net loss: $1 million
It’s clear that the statement is by no means perfect but it does show a remarkable progress in terms of revenue generation. They have managed to give the current assets a boost as well and the only things that could worry investors are the debt and the fact that, according to the report, due to the management team lowering the prices of some products, the gross profit margin has shrunk year-over-year.
Despite that, traders were loving what they were seeing. Eight exciting days pushed the value from $0.068 to $0.15 and everybody thought that the run had just begun. A correction, however, was inevitable and sure enough, it happened on August 29 when the ticker lost around 18% in just a day.
TRTC did manage to remain above $0.10 for the first three weeks of September, but unfortunately, it started sliding heavily on September 23 and since then, it hasn’t logged a green session. Yesterday, the number of shares changing hands broke the 4 million mark and, at this point, you might be wondering what’s causing the rather poor performance.
The only reason could be the latest S-1 filings published as part of a Purchase Agreement according to which an entity called Hanover Holdings is committed to buy up to $5 million worth of TRTC stock. The prospectus was approved yesterday and probably quite a lot of traders got scared of the potential dilution. Another thing to be worried about is the fact that the name “Hanover Holdings” is found in the filings of quite a lot of penny stocks and we know for a fact that many investors aren’t particularly fond of this and its affiliated entities.
On the bright side, the agreement should give TRTC access to fresh funds which will help them complete the ongoing project and, if the wind is fair, give their revenues another boost. In the best case scenario, they will manage to achieve profitability quickly which would erase the need for future stock purchase agreements. Will this happen though? Future filings should give us a definitive answer.