PMCM recently announced that it was separating into two entities; ESMG, Inc. which will contain the company’s multi-media and music related assets, and Primco Management, Inc. which will contain the company’s Medical Marijuana real estate management assets. This division will be though a stock dividend, with each shareholder of record on October 1, 2014 receiving one share of ESMG common stock for 50 shares of Primco Management, Inc. The entertainment asset will become a newly traded security on the OTCQB market.
This positive news briefly halted the stock’s recent slide, but the company’s stock continues to be under pressure, closing at $0.0011 per share on Tuesday, September 17, 2014.
Summary & Conclusion
There are longer term concerns with PMCM’s survival. As reported in the company’s most recent 10Q/A, the company experienced a significant increase in its working capital deficit, which reached $4,952,782 on June 30, 2014, as compared to $1,926,430 on December 31, 2013. This increase was driven primarily by the company’s increase in convertible debt and the derivative liability associated with this debt. The company has not generated sufficient revenue from operations and needs to raise capital to meet its ongoing requirements over the next 12 months. The company is seeking third-party equity financing (both short- and long-term) to replace its convertible debt and provide new capital. The company’s independent registered public accounting firm has stated that there is substantial doubt about the company’s ability to continue as a going concern. On a near term basis the stock is trying to find support, and several technical indicators are mixed:
• Relative Strength Index (RSI) – This momentum oscillator, shown at the top of the chart, pierced the lower bound of 30 last week, when the stock became oversold. The oscillator remains below the centerline and indicates that the stock remains under selling pressure.
• The stock’s 50-day Moving Average crossed the 200-day Moving Average on September 8th, and remains below the 200-day MA of $0.0018. The stock is currently below its 50-day MA ($0.0016), and is trying to find support above $0.001.
• Bollinger Bands (BB) – This volatility band widened from late June into early July. The band narrowed in early August, and has remained relatively stable. The stock has almost reached the mid-point of its Bollinger Bands, but its intraday failure at this point ($0.0013) on September 16th, is negative.
• Candlesticks – The stock formed a series of falling Doji patterns (small body with relatively large wicks) from September 9th through the 11th, before forming a bullish engulfing pattern on Friday, September 12th. This pattern was negated by the formation of a doji (indicating indecision in the market) on Monday, September 15th, followed by a bearish intraday reversal on Tuesday, September 16th.
• Moving Average Convergence/Divergence Oscillator – The 26-day MA of this momentum and trend following indicator crossed the 12-day MA in mid July when the stock continued its slide below $0.0024 on relatively heavy volume. Both moving averages are currently at -0.0001.
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