By Jeffrey Cohen, Investment Advisor Representative
US Advanced Computing Infrastructure, Inc.
We discussed a few companies. All have the same attributes in common.
1. Weak fundamental valuations - even down to potential bankruptcy risk. These companies lose money, dilute their equity, borrow more, and generally have weak economics.
2. They had strong volume today. Heavily traded, although a few had high volume that way typical of the stock, others were well over average trading volume.
3. Most were up significantly in price, but 1 or 2 were down significantly. To make money in the market of thinly traded stocks people have to load first before they go up, else they don't profit. Some of these stocks could be in the loading stage.
4. SEC EDGAR SEARCH is your friend with these stocks. We read the 10-Q of every one of these stocks, or we read the SEC filing that had their current earnings report and relevant news. Some of them were quite exciting reads. All are important to review before you would buy, or sell these stocks. So important to know what you are buying or selling.
5. A few of these stocks had few or no shares available to borrow to be shorted. This means that for those stocks, there was no way to bet against them by selling shares that you didn't own. A few more stocks had no options to trade. This means that you could not bet against the stock through short sales or options. In the very short term, this means that the only way to go is up for these stocks, even though short term could be just an hour or two. This scarcity of stocks to sell could be because people in the know bought many of the available shares, or the float, and the rest is tied up and unable to be sold easily. Could be tied up in M&A or SPAC conditions, or family trusts or large shareholders with tax implications.
6. Going concern risk raised in their latest filing. We looked and a few of these stocks had issued "Going Concern" risks. This means that they were unable to determine how they could continue operations for the next 12 months without raising significant fresh, new funding, and they were unable to determine how they would raise that money.
OK so what were the stocks found?
Stock ticker, company name, and closing price May 31, 2022):
VIEW View Inc. $1.27 (this one jumped 34% to $1.70 in early After Hours)
MULN Mullen Automotive $1.40
INDO Indonesia Energy Corp. Ltd.$16.73
BKSY BlackSky Technology Inc. $3.27
AMC AMC Entertainment Inc. $14.34
SIGA SIGA Technologies, Inc. $10.94
BBIG Vinco Ventures, Inc. $2.30
VRM Vroom, Inc. $1.43
SAVA Cassava Sciences, Inc. $30.60
BRDS: Bird Global Inc. $0.7573
Stocks we did not cover, but that could make this list:
BBAI Big Bear AI $5.33
MKD Molecular Data Inc. ADR $0.8635
This is not investment advice. Do you own due diligence before investing.
We are not trading on these names, and do not have a position in any of them as we write this.
Good luck out there. These are exceptionally risky stocks. Buyer beware.