Why Is Network CN (NWCN) Suddenly So Hot?

For no real reason other than a float of around 20,000,000, the penny stock of Network CN, Inc. (NWCN) has been on a significant run for the last 2 weeks setting a new 52 week high just seconds before the closing bell on Tuesday. Although the China based media advertising company saw their revenues drop more than -50% for the year ended December 31, 2013, shares of NWCN stock have more bullish than a “Cinco de Mayo” fiesta in Juarez, Mexico since bottoming out at 0.059 on April 21st. Even the chatter on message is non-existent as to why this “left for dead” Chinese penny stock has better than doubled over the past 2 weeks which leads us to believe that a possible alert and dump is due to come unless the 7,500,000 shares sold at the end of February, 2014 for $0.10 each are just finding their way to new holders other than the 506 recipients.

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Market Cap: 21.21M
Last: 0.183 ▲ +0.0580 (+46.40%)
Volume: 918,985
Dollar Volume: $141,053
Open: 0.138
High: 0.185
Low: 0.138
Trades: 61
14-Day RSI: 72.69%
1st Resistance Point: 0.1993
1st Support Level: 0.1523
52Wk High: 0.185
52Wk Low: 0.0112

Heading into Wednesday, hardly anyone knows anything about Network CN and even less about why NWCN shares have appreciated nearly 100% already this week. It’s not like they lit the world on fire with their 10-K filing which showed how advertising revenues from their out-of-home advertising in China through the operation of a network of roadside LED digital video panels, mega-size LED digital video billboards and light boxes in major cities, their sole source of revenues, dropped from $1,835,940 for the year ended December 31, 2012 to $891,366, a decline of -51.45%, for the year ended December 31, 2013.

However, on February 24, 2014, Network CN entered into 3 stock sales, all of which at $0.10 per share, which raised $750,000 which is due to be used for their ongoing operations. CPE II, L.P. and Wong Wing Kong each contributed $300,000 for 3,000,000 shares fo NWCN stock, while FAVA International Holdings Limited contributed $150,000 for 1,500,000 shares of NWCN stock.

From the outside, it looks like Network CN is going to need that $750,000 and then some in order to literally keep their lights on for their outdoor video billboards considering their gross loss for the year ended December 31, 2013 was ($1,819,399), almost exactly as much as when they generated more than twice the amount in revenues during 2012. Hence the recent surprise rise of NWCN shares from their 0.045 level a couple of weeks ago deserves some attention, but not until they return back to below where the 3 investor groups got in.

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About NWCN Stock

Network CN, Inc. is a development stage company focused on becoming a nationwide leader in providing out-of-home advertising in China, primarily serving the needs of branded corporate customers.

Click here to view the SEC filings for NWCN.
Click here to view the website for Network CN.

Authorized: 400,000,000
Issued and Outstanding: 115,919,467
Executives, Directors and Beneficial Shareholders over 10%: 95,893,733

Last 5 Trading Sessions:

Date Open High Low Last Change % Change Volume
05/06/14 0.1380 0.1850 0.1380 0.1830 +0.0580 +46.40% 918,900
05/05/14 0.0950 0.1390 0.0950 0.1250 +0.0400 +47.06% 1,372,300
05/02/14 0.0850 0.0900 0.0850 0.0850 -0.0185 -17.87% 105,000
05/01/14 0.0800 0.1035 0.0800 0.1035 +0.0285 +38.00% 257,000
04/30/14 0.0850 0.0900 0.0700 0.0750 -0.0040 -5.06% 476,000

 

Bottom Line:

Unfortunately, NWCN can be erased from the list of possible penny stock runners after having looked closer at them. This doesn’t mean that the recent volume isn’t someone gearing up for a possible promotion of NWCN stock. When you think of it, what business does Fava International Holdings Ltd., a Honk Kong publicly listed company, have investing in an outdoor advertising company when they primarily engage in the provision of funeral services in Hong Kong?
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