In looking at a Reuters report on this stock more closely, it is on the edge of profitability. While this recent news may not be a big deal, I think it will have a definite impact on the stock more because of the optics.
Those words:
"the Company concluded that its financial statements for the quarterly periods ended March 31, 2008, June 30, 2008 and September 30, 2008 can no longer be relied upon."
are saying that all 3 periods need to be restated... that is pretty serious.
they only made a small operating profit in Q3, which this announcement appears to put in jeopardy. And when you look at their financial ratios.. they do not have a lot of cash on hand.. Quick Ratio and Current Ratio both 1.08. And if you look at their Cash flow Statement you can see that cash on hand and Working Capital is decreasing... this implies big business risk and that they are basically on the edge financially, even could be looking for financing soon.
The trend is decreasing profitability with big financial risk, like it or not. That explains the current stock price. And a whiff of any kind of financial misstatement could be a killer, send it down to .01.
Anyway, it is not like a certain other stock we both know that is completely dead in he water, but I would say that this thing will take some time yet, and will languish at today's level for a few quarter. it might be a good bet to really bottom feed at .01... and some day it will explode, I just think in today's market, not quite yet.
AI
