The very prospect of featuring in NY Times is an amazing development for any company, which is why, Propanc Health Group Corp (OTCMKTS:PPCH) too find its fame within its investors. After kicking a rally from last week, the stock of the company extended its gains in the previous session as well. Not only the stock price of the company has soared to a high level, but the rate of share volume has also escalated by leaps and bounds.
The stock of Propanc Health Group Corp (OTCMKTS:PPCH) soared by nearly 26% to $0.0722 during the last trading session. Moreover, the average number of traded shares too jumped to 25.88 million, exceeding the 30-day average volume for the company by two times. The inspiring sentiment around the company is driven by its recent press note mentioning the company’s journey into the Sunday Edition of NY Times. While all was going good, Propanc Health Group Corp (OTCMKTS:PPCH)’s Form 8-K might overturn the sentiments.
Where is the danger?
The filing made yesterday hints at the possibility of shockingly massive dilution of the shares of the company. The report reads that the company has entered into various financial arrangements through issuance of convertible notes, which if converted will add to the existing piled up outstanding shares. Propanc Health Group Corp (OTCMKTS:PPCH) reported $191 million outstanding shares on February 16, 2015, which grew from $90 million in November, 2014. At this rate and the number of authorized shares available leaves enough room with Propanc to keep on issuing its shares on a discount, which makes little sense for real investors.
Over and above this, Propanc Health Group Corp (OTCMKTS:PPCH) lacks impressive financial backing too. The cash balance as low as $14,588 at the end of December 31, 2014 coupled with current assets of $52,940, which are highly inadequate for the company to pursue meaningful commercialization of its drug, which is currently under a trial. It is all up to investors to decide if they will place more attention on the company’s reckless share dilution over its Sunday appearance in NY Times.