Wizard World Inc (OTCBB:WIZD) Weakened Despite Promising Results
It is a known fact that logic doesn’t always reign in Pennyland and we reckon that Wizard World Inc (OTCBB:WIZD)’s stock performance nails the point home pretty well. The company’s been public for a little over three years, but they’ve actually been around for quite a bit more.
They haven’t changed the focus of their operations and it seems that perseverance has paid off. We read in their latest reports that they have twenty full-time employees, the press releases say that they’ve partnered with some big names in the entertainment industry like Cinedigm Corp (NASDAQ:CIDM) (quoted to be one of the biggest distributors of non-theatrical content in the U.S.), and it seems that even the “doubts about the ability to continue as a going concern” paragraph is missing from their statements.
Not that they need it. Here’s what WIZD had at the end of the first quarter of 2014:
- cash: $3.4 million
- current assets: $5.1 million
- current liabilities: $2 million
- quarterly revenues: $5.1 million
- quarterly net income: $692 thousand
As you can see, there’s plenty of cash, the liabilities have been kept at bay, and there’s even a positive bottom line. What’s more, the figures in the revenues section show that the company is making some serious progress.
During the corresponding period of 2013, they organized two events whereas this year, they managed to run four. Marketing for the 2014 events was better and the admission prices were higher. As a result, there’s been a 188% jump in revenues year over year.
Peculiarly enough, there isn’t even any toxic debt that could ruin the share structure (something that we see all too often in OTC stocks’ filings).
And yet, people simply don’t seem interested in the ticker. Generally speaking, the volumes have been small and although yesterday, WIZD managed to shift around $660 thousand worth of shares, it lost nearly a tenth of its value along the way. What’s more, it hasn’t registered a green session for more than a week and while this may be perceived by some as a buying opportunity, the potential lack of liquidity in the future could present itself as a problem.
There is another thing that could deter some of the investors. Last year, the company issued 15 million common shares. Most of them saw the light of day as a conversion of preferred stock or as an exercise of options and although the report says that there are no more preferred shares, there are still options that can cause some dilution.
Hopefully, the company will remain profitable and the effects of the potential share issuance will be minimized. Still, even though there are plenty of things to like about WIZD, consideration of the risks involved is, as always, extremely important.
Although WIZD‘s dollar volume was impressive yesterday, it was nowhere near as huge as the one logged by Fortitude Group, Inc. (OTCMKTS:FRTD). FRTD managed to shift more than $4.7 million worth of shares while the price gained a whopping 203%.