LTS Nutraceuticals Inc. (OTCMKTS:LTSN), the health and wellness holding company, seems to be recently drawing the attention of the market participants after the company released interesting news.
A reduction in the company’s debt was released, which reduced the financial risk of the current shareholders.
But, there is more. The company is really transforming the business.
A change of control has occurred; a new CEO has been elected. Also, the company has new facilities.
In our opinion, the market seems to believe that new opportunities are going to be created. We couldn’t agree more.
Have a look at how the volume increased recently.
The market reacted to the news by purchasing shares and made the volume spiked up and hit the level of 30 million shares some days.
We will provide all the new details in this new article and will also explain why the share price is moving quite violently.
Reduction of debt
On August 15, 2017, the company released that it had decided to retire the largest convertible note associated with the previous acquisition. There is another convertible debt with maturity date of December 14, 2017:
“The company has retired the larger $75,000-dollar convertible note (principle and interest) associated with the acquisition, leaving the smaller $50,000 dollar convertible note with a maturity date of December 14, 2017, the company expects to utilize its option and retire the note with cash not shares. There currently are no other convertible notes.” Source
We appreciate this business decision, as the financial risk of shareholders was reduced, consequently the intrinsic value of each share increased.
It is a very good news and makes sense that the market reacted by acquiring shares in August. Have a look at the market reaction and note that more than 40 million shares changed hands when the news was received:
Change of Control
Very recently, we could read that new shareholders had acquired shares of the company, the CEO had been changed and a change of control had occurred.
This is an image that we could see on the LTSN’s website:
Who is the new CEO?
We could read in the iHub Forum that he is also the CEO of other public companies that are not performing very well in the market.
In our opinion, the market performance of other businesses run by Mr. Kog Seng Yeap does not really matter here. The fact that he is the CEO of other companies is a good news. It shows that he has a lot of expertise and has also received the trust of other market participants who want him to run their companies.
What was the market reaction?
In November, the market reacted positively to these news. Most market participants seem to agree with us that the new CEO will bring his expertise accumulated and maybe new business models. Check up the share price spike:
Low Float Runner
We believe that LTSN is an interesting stock for those who are interested in volatility plays. Have a look at the following share capital stats:
|Authorized Shares||750,000,000||a/o Nov 28, 2017|
|Outstanding Shares||353,823,324||a/o Nov 28, 2017|
|Held at DTC||Not Available|
|Float||89,550,250||a/o Jun 20, 2017|
The float represents only 25% of the total outstanding shares, which means that big market orders could move the share price quite a bit. This is actually what we have seen recently. When the new CEO was elected, the price spiked from $0.0024 to hit the $0.0053 share price level. This means that some market participants were able to make triple digit returns.
That’s the magic of share price volatility. But, readers will also need to be careful, as big share price swings can sometimes result in big losses as well.
We believe that a lot of new share price moves could occur, as news should arrive soon. The new financial statements should be released and the CEO will need to explain what kind of business transformation is being planned for the company. He will have to take a lot of strategic decisions that will affect much of the business model of LTSN, thus market market participants will be alert. We encourage readers to do the same!
Currently trading with a market cap of $1.1 million, LTSN is an exciting story among small caps. With little cash on the balance sheet, we also believe that the CEO will need to raise money. He has contacts in other sectors that may help LTSN obtain new capital.
To sum up, this is a business that is reinventing itself and finally making smart moves. Be alert!
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Image courtesy of John Finn via Flickr
Disclosure: We have no position in LTSN and have not been compensated for this article.