Axion Power International, Inc. (OTCMKTS:AXPW) Put an End to The Downward Slide
Ever since the start of August the stock of Axion Power International, Inc. (OTCMKTS:AXPW) has been constantly moving towards the bottom of the chart posting only a couple of green session here and there. On Tuesday it even fell to an all-time low of 10 cents per share. This has been the story of the ticker for the past 2 years ever since it reached $1.20 in early-2011.
Yesterday though the company showed that they still have some fight left in them and the stock surged by nearly 11% and returned to $0.115 per share. Even more impressive was the enthusiasm displayed by investors. They were able to shift the almost record number of 2.6 million shares.
What more than likely sparked the impressive buying was the PR article the company issued a couple of hours after the market opened. In it they announced that a presentation is going to be held showing the progress of the NS 999 Electric Switcher, a hybrid locomotive using AXPW‘s PbC batteries. The creation of the locomotive by Norfolk Southern has met some difficulties but shareholders of the company will be glad that it has been successfully completed.
Unfazed by the poor performance of their stock, AXPW have been able to continue along with their business plan. Their main product – the hybrid lead-carbon batteries has been successfully implemented in hybrid trucks which led to increased orders for batteries from ePower Engine Systems. Their automobile manufacturer partner has also finished their testing program and is now trying to solve a sole source supply chain problem before using the batteries. In 2011, Axion connected their PowerCube to the PJM grid as a battery based frequency regulation device and since then they have only increased its participation in the network to the current 8 hours per day for 5 days per week.
So why are investors keeping away from the company? Well, a big red flag is the toxic funding that took place in May this year. They sold convertible notes and warrants for approximately $9 million and now according to the terms of the deal have to issue shares on monthly bases for a total of 9 payments. Not only that but another $1 million in subordinated convertible notes and warrants were sold to insiders of the company. The severe dilution of the outstanding shares even forced the company to increase the authorized amount by 150 million to a total of 350 million shares.
It is up to you to decide whether the promise of their technology outweighs the devastating effect of the share dilution. For now they have enough cash reserves to sustain their business till 2014.
As we said in our previous articles the Awesome Penny Stock pump for Pacific Clean Water Technologies, Inc. f/k/a Unseen Solar, Inc. (OTCMKTS:PCWT) came to its inevitable end after the stock crashed for two consecutive session losing more than 80% of its value and dropping to 4 cent per share.