Is Alkaline Water Company Inc. (OTCBB:WTER) Going To Get Pumped Again
Recently, Alkaline Water Company, Inc. (OTCBB:WTER)’s stock has been trading slowly and has rarely managed to generate a daily dollar volume above $100 thousand, which is rather odd considering all the effort the company is making to promote itself.
And yes, WTER did manage to add a good 17% to its value on a low volume in the first session of the week. And the presses keep churning and the news keep coming, but the company isn’t exactly in a shape that would make it capable of supporting its highly overvalued market cap.
At least this is what the numbers contained in their quarterly report for the period ended December 31, 2013 suggest. You can check the ones of prime interest below and be the judge for yourself.
- cash: $22.4 thousand
- current assets: $281 thousand
- current liabilities: $563 thousand
- quarterly revenues: $171 thousand
- quarterly net loss: $2.3 million
Given these numbers we consider that the current valuation of WTER‘s stock, which stands at $11.7 million, is quite high. Furthermore, there is the matter of the $3 million paid promotional effort from the end of last year, which means that someone was holding a great amount of stock ready to be dumped in order to pay such an amount for a pump and doesn’t really think that the company has potential for profit.
And here come the recent news. The company announced a public offering at a price of $0.15 per share which was more than half than the one at that time. The offering was announced yesterday, early in the morning and was for and aggregate amount of $1.8 million.
This might be the reason behind yesterday’s tragic session for WTER, which was accompanied by a trading frenzy. In the end of the day, WTER was 60% down at $0.1435 on nearly 20 times its average volume, which generated a trade value of $2.5 million, the highest in months.
Today it was announced that the offering has grown to a sum of $2.6 million, which may lead to further losses. This makes consider the possibility that we might be seeing a new expensive promotional campaign as soon as the deal is finalized, in order for those shares to be dumped.
In any case, the regular traders might get burned, so it is always a good idea to do your due diligence and weigh out the risks before making an investment decision.