Wizard World Inc (OTCBB:WIZD) Bleeding for no Good Reason

We’ve said it before and we’ll say it again: Pennyland can be a strange place. Stocks sometimes go up for no reason whatsoever and they experience crashes that are just as inexplicable. If there ever was a ranking for the weirdest performing OTC stock, however, it would probably be won by Wizard World Inc (OTCBB:WIZD).

Take this for example: on September 4, 2014, the ticker logged a 52-week high of just under $1.30 per share, but on October 1, less than a month later, it somehow managed to briefly sink to the absolute bottom of $0.0001. On the whole, the volumes are pretty much non-existent and whenever WIZD does receive some attention, it tends to sink towards the bottom.

Friday’s session is a classic case in point. Investors suddenly decided to give the ticker a chance and in a matter of six and a half hours, they traded more than 1.4 million shares. Instead of going up, however, the increased volume pushed WIZD down and it finished the day with a quarter of its market cap gone. It closed the week at just under $0.44 per share.

The rather heavy crash is especially strange considering the lack of any obvious catalysts. In fact, a couple of press releases on Wednesday and Thursday suggested that the stock could actually move up. Apparently, however, they simply aren’t enough.

Neither is the fact that WIZD‘s financials are relatively solid. The 10-Q for the first quarter of 2015, for example, looks like this:

  • cash: $5.3 million
  • current assets: $7.8 million
  • current liabilities: $5.3 million
  • quarterly revenues: $6.1 million
  • quarterly net loss: $982 thousand

The ones who have been around the company for long enough will probably notice that the profit from a couple of quarters ago has now been turned into a loss. That’s true, but we’re not sure that in Pennyland, where a profitable business is hard to come by, this really is such a massive problem, especially when you have in mind that the management team have announced some exciting new developments in the recent weeks and months.

And this, in turn, leads us to the million-dollar question: “Did Friday’s crash present investors with a good entry point? Or is it a signal to leave while you still can?”.

The company certainly has a few things going for it and if people start paying attention, things could get interesting. The lack of liquidity and the shaky chart, however, are definitely worth considering before you put any money on the line.

About twenty minutes after the opening bell, WIZD is sitting at $0.39 (11% in the red).

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