ARISE Technologies Corporation (TSE:APV) shined in another attempt to rally, as the traders’ anticipation expressed itself in price volatility.
The price jumped 27% on Wednesday upon significantly improved daily trading volume. The reasons behind this sudden spike up point mostly to technical break up and the not so long ago promised improvement in fundamentals. The stock was similarly pushed up half a month ago when the company posted significantly better quarterly results guidance.
ARISE stated they will see the first quarter revenue more than double that seen in 2009. The forecast suggests an increase in company’s valuation and thus the share price keeps trading with the premium until the confirmed numbers are published.[BANNER]
Further adding to the fuss, the company recently completed a $300 thousand drawdown from their Equity Facility and announced another $130 drawdown, which should be finalized tomorrow. These additional funds suggest a somewhat improveed balance sheet, but, considering that average quarterly losses reach into the millions, it shouldn’t have too much influence on their business.
Since they don’t talk about it, the company is not likely to see profitability in the first quarter and thus they need additional funds. Back in the 4th quarter of 2008 ARISE had reached nearly $19 million in revenue, but that only resulted in increased losses. The only good thing for the shareholders is the company’s decision to cover these losses with debt financing instead of the equity, which spares the dilution.
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