VGTel Inc (OTCMKTS:VGTL) Flexing Its Muscles Again

Two months ago, VGTel Inc (OTCMKTS:VGTL) was hovering around the $0.002 mark. Right now, it’s sitting at over $0.02. What’s more, on Friday, it gained a respectable 25% and it reached $0.0235 per share – the highest close in just under six months. To top it all off, investors traded more than $117 thousand worth of shares which goes to show that there’s no shortage of people who see the Bull case for VGTL. But what is it all about?

The only thing that seems to be fueling the stock is some hype around the company’s management team. Ms. Amilya Antonetti was appointed as CEO of VGTL at the beginning of last month and, as you probably know, she is a well-known entrepreneur who has a history of successful business ventures. Her frequent appearances on TV and radio also contribute to the excitement around VGTL.

Many people reckon that Ms. Antonetti is going to turn VGTL‘s fortunes around and they are not shy about sharing their opinion with everybody else on Twitter which is definitely playing a role in the recent volume increase.

So, that’s the Bull case covered. What about the bears?

Well, information about VGTL is not exactly up-to-date. In fact, the latest press release came out more than five months ago and the most recent financial statement covers the last three months of 2014. It looks like this:

  • cash: $43,199
  • current assets: $737,782
  • current liabilities: $2,093,015
  • NO revenues
  • quarterly net loss: $285,219

VGTL has never really been the OTC company with the best balance sheet out there, but it was at least managing to keep dilution on a leash. Unfortunately, that no longer seems to be the case. The O/S count grew from less than 22 million in February 2014 to more than 27 million in February 2015 and recent volumes of over 40 million shares per day suggest that it’s now much higher. According to New York’s Secretary of State, the number of authorized shares has grown from 200 million at the end of last year to 2 billion right now.

The lack of up-to-date financial reports means that we can do little more than speculate on the reasons behind the recent dilution. What we do know for sure is that there was a lot of toxic debt outstanding at the end of 2014 and it was convertible into common stock at discounts ranging from 40% to 45%.

So, you’ve got Ms. Antonetti’s reputation on the one hand and VGTL‘s appalling lack of financial stability on the other. We’ll leave it up to you to weigh the odds and make your investment decision, but while you’re at it, you should probably bear in mind that Ms. Antonetti has yet to become an employee of VGTL.

The 8-K informing us about her appointment said that “The company and Ms. Antonetti are currently working together on the terms of employment beyond the first 90 days and will file our employment agreement with the SEC when it is finalized“. Nothing has been filed since then.

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