Traders were all over the Nasdaq delisted penny shares of Valence Technology Inc. (VLNC) as they entered into the flipping pit on the OTC yesterday. The makers of lithium phosphate batteries watched as their stock price plunged from its previous close at 0.65 to open at just 0.042. Traders flipped the Company’s stock like a ride in the Texas Star at a carnival. Almost 32 million shares traded, a record volume day by roughly 50 times the average, as VLNC stock price dove to 0.02 before traders stepped in to walk away with a 150% gain as the shares closed at 0.05, up 19.05% on the day from the open price, after $1.2 million was exchanged.
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The company disclosed July 12 that it filed a voluntary petition for reorganization in the U.S. Bankruptcy Court. Valance stated it plans to complete its restructuring this year, and owes $82.6 million to creditors, according to the filing. Similar to AMR Corp. (AAMRQ), the shares of VLNC may enjoy trading until the restructure is complete and the shares become worthless. As of April 30, 2012, was 169,976,618 shares outstanding.
About VLNC Stock
Valence Technology Inc. is a diverse, vertically aligned company. From their patented cathode materials to their standard family of scalable U-Charge® systems and customs systems designed for specific applications, Valence offers commercially proven solutions with worldwide application and engineering services to serve their customers. For many applications, the Company’s scalable U-Charge® systems, complete with programmable Battery Management Systems, are the logical choice to avoid the expense and long development cycles of custom systems. However, when a custom system is required, Valence has the technology, tools and experience to fulfill their customers’ requirements.
Click here to view the SEC filings for VLNC.
Bottom Line: These bankruptcy filed penny stocks are all good fun to trade, but they are no different from a classic pump and dump since shareholders of common stock are only due, if anything, the stated par value of the stock when the company closes. There are better place for penny stock trading and VLNC should be avoided.
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