A few random thoughts:
I'm a long, and wear the blue goggles. I was introduced to the company as part of the spectrum and not from the old SBRT.
The stock is very thinly traded and MM's keep a wide spread between bid/ask. It opened with 100,000 on the bid at $0.40 and the ask was $0.585 or around there before settling in around the lower 40's.
Right now there are no buyers, so the MMs are moving the price where they need to, to create a market. That is their purpose; they make a market.
Why no buyers? I personally think it has a lot to do with the recent selloff in the broader markets. Risk aversion is creeping in which never helps micro-caps. This causes stocks that trade at high multiples of sales or earnings to trade at lower ratios.
From a technical standpoint, the stock held the 200 MDA a long time before breaking down. It had maintained support for a long period of time after the last breakout. This would have significance if the stock was actively traded because it would show a battle between buyers/sellers and longs/shorts. But this is very easily manipulated in penny stock land on the OTC.
Being thinly traded, if you are a retail investor, and there is no retail buyer, then the MMs are going to lower the bid and buy from you at a discount so they can sell at the ask and make a good spread in the process.
Since this is a penny stock, only institutions and foreigners can short the stock. US retail cannot. So technical analysis is pretty useless other than painting a picture of what the MM's want you to see.
Considering how thinly it's trading, I'd be surprised if anyone was shorting the stock. This is reported online on a monthly basis and seems to be fairly stable with a low percent sold short. The big increase reported by the bot news sites just matched the change in share structure when the reverse merger completed. As a percentage of shares outstanding, it remained about the same when the authorized shares increased as part of the merger.
There are 197M shares outstanding with another 25M or so warrants to be exercised and some other, lesser amount of warrant and option overhang. The float seems to be very low as reflected in the daily volume.
Recent PR/8-K indicates that the CEO and President have their shares locked up, with a conversion price at $1.50.
Remember, a warrant is essentially an option to purchase shares directly from the company at a set price without having to buy on the open market. Investors can choose to exercise the warrant and give money to the company in exchange for stock at a predetermined price. Or they can sit on the warrant and decide later. Or they can let it expire, taking no actions.
Upon merging a few months ago, we already knew these warrants were issued and had a set conversion price in the upper 30's. These warrants were issued to spectrum licensees that purchased spectrum within the past year as an incentive to buy into the spectrum program that IOTC leases from. Doing so allowed the company to issue more FCC licenses, and grow their footprint via assigned leases through a national lease program.
A few days ago the company issued an offer to those specific warrant holders. The offer was to increase their warrants by 20% and giving additional fractional FCC spectrum on the condition they exercised their options now or in the near future. This would allow the company to get needed cash to fund certain initiatives which have great promise.
The company needs cash to grow. They are a going concern and have never turned a profit. So enticing the warrant holders to exercise is prudent because growth is necessary.
The company is on a more solid foundation post-merger than pre-merger. They also have much higher upside.
The good news is, IOTC has a ton of potential.
In the near term, they have IoT services in niche industry/markets that have great potential for future revenue streams. These continue to expand into new industries and new opportunities. They are all in their infancy. They are piloting several technologies and proving the technology in anticipation of orders increasing, thus growing their IoT business, and spectrum usage.
In the long term, they are still building out their national network. There are still a number of FCC licenses nationally that are not yet released by the FCC as part of the Sprint rebranding effort. The company expects to receive word on these in the near future. Once released by the FCC, the footprint will grow significantly. We should eventually see PR or an 8-K on this as it would be a material event either way the FCC acts.
The long term value is not in the IoT services, but in the IoT network.
Once they can get to the point of having a 95% footprint, the value of the spectrum based on other large spectrum holders and previous auctions should be several billion dollars. Once it reaches 95%, more national players will start using the network, and bigger deals can be made. I know their stated goal it to be a pure-play for IoT, but there may be an opportunity to leverage the sub gigahertz network and partner with other higher MHz network holders to create a 5G network.
Even with all the potential, the reason I decided to invest is because I believe the CEO has the ability to grow this company from nothing to something significant. He's previously created and sold several companies for billions of dollars. This is not your typical OTC CEO who got their MBA from Arizona State. He's a proven leader and has demonstrated significant success in creating and selling two wildly successful companies.
Since the merger, we have hired well respected auditors and are looking to uplist to a better exchange, away from the OTC model of buying and selling shares. Doing so will allow small institutional investment firms to have the option to participate in buying shares, where today they would not buy in a stock listed on the OTC. Baby steps.
Until then, for me, it is a waiting game. I hold about 2/3 the number of shares you do around $0.67. I personally don't wish to time my investment (e.g. sell now and try to buy lower), and am ok holding on to the speculative investment knowing it will make wild swings. At this point I don't anticipate adding to my shares until I see how some upcoming developments unfold.
Of all my investments, this once could easily return 4x my investment in the coming years.
If the company successfully gets FCC leases that covers 95% of the US, and the market rewards them with the same valuation other national spectrum holders have received, it's a several billion dollar company.
This is all pie in the sky, but in my opinion, it is one OTC stock that has a legitimate chances to make it.
btw, just for fun:
If the spectrum is worth $2B once the network is built out.
$2,000,000,000 / 225M shares = $8.88, just on the value of the spectrum alone.
This should not be construed as advice to buy or sell. It's simply my opinion out of many.
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