Since the start of the month, bullishness has been surrounding the penny stock of Global Digital Solutions Inc. (GDSI) on expectations of their arms deal merger. Back in October, the Company and Airtronic USA, Inc. spoke in detail and entered into a Binding Merger Agreement which would land the well-respected, award-winning manufacturer of critical battlefield weapons including the MK 777, the RPG-7 rocket launcher, and the M203 grenade launcher, the most widely used grenade launcher in the world as a wholly owned subsidiary. For some reason though, GDSI stock has gone ballistic since the start of the month, gaining over 300% and rising.
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GDSI Stock Chart
Market Cap: 4.19M
Last: 0.125, up 0.07 (127.27%)
Volume: 115,335
Dollar Volume: $9,078
High: 0.125
Low: 0.06
Trades: 14
Average Trade Size: 8,238
Authorized: 175,000,000
Issued and Outstanding: 42,621,522
Float: 13,943,451
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It’s now been more than 6 weeks since the announcement was made and the waiting period for some eager traders seems to have expired. Shareholders of both companies approved the merger, yet it is subject to approval by an Illinois bankruptcy court since Airtronic USA is operating as a debtor in possession under Chapter 11 bankruptcy.
Global Digital Solutions is no shell that Airtronic USA will be merging into. The social consulting and security-solutions provider in “unsettled areas,” booked net revenues of $81,367 for the three months ended September 30, 2012 versus $3,350 for the same period in 2011. While cost of sales for the periods were $57,204 and $800 respectively, gross profit for the three months was $24,163, an 847% increase from the same period the year before; $2,550.
While there is still no time frame or guarantee that the Bankruptcy courts will rule in favor of Airtronic USA’s planned move, the speculation has been well worth the risk considering the pink sheets listed GDSI could soon be the ticker for the largest woman-owned small-arms manufacturer in the country.
About GDSI Stock
Global Digital Solutions is refocusing its business strategy on providing knowledge-based and culturally attuned societal consulting and security-related solutions in unsettled areas.
Last 5 Trading Sessions:
| Date | Last | Change | % Change | Volume |
| 12/05/12 | 0.0550 | +0.0151 | +37.84% | 146,500 |
| 12/04/12 | 0.0399 | +0.0139 | +53.46% | 160,000 |
| 12/03/12 | 0.0260 | -0.0090 | -25.71% | 5,100 |
| 11/30/12 | 0.0350 | +0.0140 | +66.67% | 94,500 |
| 11/28/12 | 0.0210 | +0.0010 | +5.00% | 165,600 |
Bottom Line: GDSI has such a low float for a potential merger candidate that it is a must have on the list of penny stocks to watch. Assuming the deal goes through and the Company puts up the $750K needed to restructure the debt, GDSI stock could see a huge short -term rally well beyond the current highs. In that event, look for entry positions further down since some sellers should be sitting at the table in the coming sessions.
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