BTCS Inc (OTCMKTS:BTCS) Sinks To New Lows
tags: BTCS
The nightmare for BTCS Inc (OTCMKTS:BTCS) continued during yesterday’s session. The stock of the company suffered yet another disastrous trading day of incessant selling. In fact, the sheer amount of shares that got dumped on the market reached record levels with the daily volume surpassing 46 million shares. By the time of the closing bell BTCS had wiped nearly 39% of their value falling to $0.0044 per share.
A little over a month ago, at the start of June, the stock of the company was trading above 10 cents per share but now it is sitting 95.6% lower. The losses could get even scarier, though.
The downfall of the stock was caused by a frightening amount of freshly issued shares. Maybe it would be more appropriate to say that investors were simply drowned in dilution. Let’s start with the 8-k filing that BTCS submitted on June 22. It revealed that between June 16 and June 21, a period of just 5 days, a total of 49.8 million shares had been issued as a conversion of around $600 thousand in debt. Yesterday a new 8-K got filed – this time investors learned that between June 22 and July 5 another 37.8 million shares had seen the light of day as a conversion of $37,500 in debt and the exercise of warrants.
If you thought that things can’t get any worse, well, you will be wrong. Due to the conversion of notes several obligations arose for BTCS. According to yesterday’s filing now the company will have to issue 474 million shares fresh shares and warrants for the purchase of nearly 950 million shares. In addition, the conversion price of the company’s outstanding junior and senior convertible notes must be lowered to $0.00564. The authorized shares of the company cannot accommodate the issuance of such a vast amount of new shares. That is why BTCS will seek shareholder approval to adjust the company’s capitalization.
The depressing financials, the serious problems caused by the appointment of a liquidator for Spondoolies, and the ongoing dilution turn BTCS into an extremely dangerous choice. The stock of the company could bounce after experiencing such a rapid depreciation but forming a more prolonged recovery might prove to be extremely difficult.
