Universal Power Corp (CVE:UNX) Stock Sees A Power Loss

UNX_chart.pngUniversal Power Corp (CVE:UNX) tanked 8.5% on Thursday witnessing an even more harsh drop amid the trading day, in a ride down that started at the beginning of the week.

With no news to trigger this sell-off the blame goes to technical move below the most recent support. The company saw a significant price increase since the beginning of the year, but also saw increased losses in their last reported quarter, which obstructed further price appreciation.

The current market cap of $145 million appears exorbitant for a company with $11 million in book value and no revenues.[BANNER]

The most recent financials also had some upturn to them:

  • Significantly improved cash position of $3.48 million;
  • Recorded expansion of oil and gas properties;

Universal_power_logo.jpgThe fact that they remain an exploration stage company guarantees price volatility. The loss before the effect of notes has increased nearly 10% and share dilution reached nearly 20% over the last year as a resuly of the conversion of outstanding warrants.

Outstanding convertible instruments pose a further threat of dilution, as 8.14 million warrants with an average conversion price of $0.57 were outstanding as of the year end 2009, 3 million of which expired on January 17th this year. Additionally there are 4.7 million outstanding stock options with an exercise price of $0.31.

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