Worlds Inc (OTCBB:WDDD) Spirals Downwards As Investors Get Impatient

7WDDD.pngNormally, when you are considering your investment options, you are looking through websites and filings of many small cap companies, evaluating different business sectors and comparing the operational plans, financial positions as well as a host of other fundamental factors that should always be looked into before deciding on a ticker that’s worthy of holding your money. If you’re checking out Worlds Inc (OTCBB:WDDD) and looking at these things alone, you would probably just walk away.

Why? Well, for one, you should keep in mind that WDDD don’t have operations as such. Back in the day they developed a 3-D chat service that, they say, was absolutely revolutionary. In 2011, however, they decided that spinning it (and all the related assets) off is a great decision. They transferred their only source of revenue to another OTC enterprise, Worlds Online Inc. (OTCBB:WORX) and once that was done, WDDD were left with nothing more than a few patents.

According to their latest 10-K, they also had just one employee, the company CEO, Mr. Thomas Kidrin (who is also the CEO of WORX) and when you try to find the location of the principal offices, you see that it’s nothing more than a residential house in the quiet town of Brookline, Massachusetts.

Things don’t look terribly well in terms of financials, either. WDDD‘s latest 10-Q covers the period ended June 30 and it contains the following numbers:

  • cash: $106 thousand
  • current assets: $2.3 million (mostly in restricted cash)
  • current liabilities: $5.7 million
  • no revenue
  • quarterly net loss: $569 thousand

With all this in mind, you’d be forgiven for thinking that absolutely no one is interested in putting their hard earned cash in WDDD. Yet, the chart at the beginning of the article suggests that investors are indeed paying attention and that trading has been particularly intense over the last couple of months. What caused it?

The lawsuit against video games giant Activision Blizzard, Inc. (NASDAQ:ATVI). It all started in March 2012 when WDDD filed a total of fifty-seven complaints against the $19 billion NASDAQ venture alleging patent infringement. We’re quite sure that WDDD were hoping to reach a quick and easy settlement involving some money being transferred between the two enterprises as well as some licensing fees to help them survive in the future, but it would appear that ATVI had other ideas.

The video games giant has managed to postpone the date of the hearing a couple of times already and after the latest rescheduling, Judgement Day appears to be October 17. WDDD are keen to point out that the only outcome possible is positive and it’s pretty clear that these claims brought in quite a lot of investors. Unfortunately, the performance from the last couple of months suggests that impatience might be starting to kick in.

1WDDD_logo.pngGenerally speaking, the ticker has been on a downward slope since June but the last three sessions during which around a third of the value was wiped out are particularly disturbing. The number of shares that changed hands is also huge (yesterday’s 3.5 million broke the all-time record) which could suggest that either quite a lot of investors are hitting the panic button, or someone is offloading a large amount of stock on the open market. We’ll probably never know what caused the massive slide, but one thing that we will learn during the next couple of sessions is the future movement. The options are not that many – WDDD might bounce back up, or it could continue to dig itself further into the ground. Whatever happens, be sure to weigh the risks carefully before making any decisions.

Other tickers that caused quite a lot of stir during yesterday’s session include Virtual Piggy, Inc. (OTCBB:VPIG) who managed to regains some composure after being crushed by negative reviews over the last couple of days and North American Oil & Gas Corp (OTCBB:NAMG) who are the subject of a multi-million dollar promotional campaign that now involves a paper mailer brochure.

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