To mention that the stock price of Minerco Resources Inc (OTCMKTS:MINE) has not been performing would be an understatement. The stock has been moving lower and lower on the chart for almost seven months now. On August 28, 2015 the stock closed at $0.0027 which is over 77% lower than high of $0.012 recorded in January 2015. In last trading session, the stock price of MINE declined more than 13% to close the trading session at $0.00130.
After almost two months of silence, Minerco issued a new PR reporting several important things. The company intends to change its name as well as the name of its subsidiary Level 5 Beverage Co. to ‘Minerco Inc’ and ‘Athena Brands’, respectively. Also, it plans to execute a 1-for-100 reverse split in the coming future.
The market reaction on reverse split news was immediate as in a couple of hours before the session close Minerco’s stock plummeted recording a 52-week low of $0.0011 per share. Ultimately the company ended the session with loss of more than 44%.
The share structure
Minerco Resources Inc (OTCMKTS:MINE) have to take some substantial steps to improve their bloated share structure. As of June 19, the company reported over 3 billion outstanding shares. After the completion of reverse split, the count will be 34.9 million outstanding shares. At the same time, the company will reduce the authorized share amount to 250 million. As per the Schedule 14C submission, the split is expected to be completed before the end of this year.
The reduced outstanding number may enable owners of convertible notes to convert them into common shares, which will result in massive dilution of the common stock. At the end of April, Minerco reported $69,000 in convertible debt and $161,000 in derivative liabilities. On June 2, 2015 the company sold a $250,000 note posing more threat to shareholders value.