Wisdom Homes of America Inc (OTCMKTS:WOFA) Slips on Day Two

Wisdom Homes of America Inc (OTCMKTS:WOFA) slipped and fell 8% yesterday, finishing the session at $0.0064 per share. Some would say that there’s nothing too dramatic about that. They’ll argue that considering the massive 337% gained at the end of last week, a slight consolidation is the most normal thing in the world.

It is true that WOFA logged some pretty incredible gains on Friday and it’s also true that small corrections often follow massive jumps. That doesn’t mean that you should put your money on the line without doing your due diligence, however. Especially when you consider the reason behind last week’s amazing surge.

It’s all because of a promotion. The Wolf of Penny Stocks, a relatively new outfit that seems to have connections to Epic Stock Picks, did the touting for free, but the results were absolutely amazing. As you probably know, however, the hype coming from pump campaigns tends to dissipate rather quickly which means that volatility could soon make WOFA unpredictable.

So, if you’re willing to trade the stock, you should be extremely careful and keep your eyes peeled at all times. But what if you’re looking for a more serious investment? Does WOFA fit the bill on that front?

Well, the latest financial statement shows that, at least revenue-wise, the company seems to be doing relatively well. Here’s a summary of all the figures recorded on June 30:

  • cash: $252 thousand
  • current assets: $2.6 million
  • current liabilities: $3.7 million
  • quarterly revenues: $1.3 million
  • quarterly net loss: $1 million

The business is relatively new which makes the Q2 revenues look decent enough. We do witness a terrible seasonality, though. Poor weather conditions during the first quarter prevented WOFA from logging any sort of significant sales which is a bit of a worry. So is the net loss and so is the significant amount of debt convertible at a 42% discount to the market price.

Even if you are still convinced that WOFA can go through the pump, the dilution, and the financial difficulties, and still come out unscathed on the other end, you should still be aware of the fact that you’re investing in a company that could reverse split its stock at any time. The planned increase in the number of authorized shares is also worth bearing in mind.

Last but not least, you might want to take a look at what sort of people have been running the company before you invest. Up until recently, a person by the name of Mujit Johal was acting as the CFO and if you take the time to do a little bit of research you will find his name in the filings of numerous penny stock companies. You’ll also find it in this document. Mr. Johal resigned a few weeks ago, but we still reckon that considering the ongoing promotion, keeping his reputation in mind is still a good call.

In early trading today, WOFA is crashing hard. About fifteen minutes into the session, it’s sitting at $0.0045 per share (almost 30% in the red).

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