World Surveillance Group Inc (fka WSGI)

[WildWest]

HotSTOCKED Report- It appears from this analysis it will take a major contract to overcome resistant...

World Surveillance Group Inc. (OTC:WSGI) Jumps to a Stubborn Resistance Level

Yesterday the management of World Surveillance Group Inc. (OTC:WSGI, WSGI message board) published a letter to the company's shareholders outlining some past achievements and future goals. General reaction on the market was positive, but it is very unlikely that WSGI will immediately start to grow. WSGI.png

In response to the company's optimistic and extensive statement from yesterday morning, the trading session that followed closed with a positive outcome - a 26.20% increase in the share price from the previous close to $0.0631.
WSGI recorded the highest trading volume for the past half a year with 3.35 million traded shares, but the $0.07 resistance still holds.

Despite the recent management optimistic projections, WSGI stock price has been in a downtrend since May last year. The company's financials show that WSGI still has very insignificant revenue, weak cash position with $257,000 in current assets and a shocking amount of debts - over $16.9 million, all of which current. While World Surveillance Group is in an attractive industry as a technology company, its future is by far not certain, even with the announced just a couple of days ago funding agreement.

On Tuesday, WSGI announced the closing of its first Securities Purchase Agreement with an institutional investor. The agreement is for $5.5 million, and the company has already received a first tranche of $500,000 in exchange for the issuance of a Convertible Debenture to the investor.World_Surveilliance_Group.jpg

World Surveillance Group claims that it will use the proceed to expand its operations and to conduct additional testing, though it is yet to see if all that would come true.

Even though the institutional investment should improve the liquidity of WSGI stock, and make it thus more popular, it is also worth mentioning that it will cause huge shareholder dilution. On the same day on which WSGI announced its new funding agreement it also filed a registration statement to register up to 50 million shares of common stock issuable upon conversion of the above convertible debenture.

http://www.hotstocked.com/article/30271/world-surveillance-group-inc-otc-wsgi-jumps-to.html