WINDSTREAM TECHNOLOG (OTCMKTS:WSTI) Crashes On Record Volume

Yesterday, in just a single session, investors shifted the unprecedented number of close to 21.5 million shares of WINDSTREAM TECHNOLOG (OTCMKTS:WSTI). The record volume, howeve,r did not translate into equally as impressive climb for the stock. On the contrary, the sheer number of shares that got dumped on the market caused WSTI to crash so hard that by the time of the closing bell the company was sitting 28% in the red at $0.01.

Last week WSTI did manage to post three consecutive sessions of gains but the positive momentum that was sparked by the letter to the shareholders issued by the CEO of the company was quickly obliterated. For those who have followed our articles this shouldn’t have come as a total surprise. Although WSTI are reporting progress with their operations the numerous red flags surrounding them remain as serious as ever.

The financial report for the first quarter of the year showed that as of March 31 WSTI had:

• $193 thousand cash
• $4.7 million total current assets
• $10.2 million total current liabilities
• $969 thousand sales
• $987 thousand net loss

Despite the fact that the company generated close to $1 million in revenues during the quarter, a feat achieved by not that many pennystocks, its financial state fails to inspire much confidence.

The main reason for the devastating chart performance, however, is the dilution of the common stock. Between March 31 and July 24 the outstanding shares of the company more than doubled – from 88.6 million to over 196.2 million shares. The majority of the freshly issued shares came into existence through the conversion of debt at severely discounted prices. In fact the latest 8-K form detailing the conversions shows that 10.8 million shares were issued at $0.00803 each, price that is actually below the 52-week low of the ticker of $0.0085.

As of the end of March WSTI reported $3,495,581 in convertible notes payable which could mean that the conversions may not be coming to an end any time soon. Investors must wait for the next quarterly report that should be submitted by the middle of August in order to see just how much convertible debt is still outstanding.