On4 Communications Inc (OTCMKTS: ONCI) is struggling for direction even after management touting yet another record-breaking quarter, depicted by a year-over-year increase in sales. A decline in operating costs signaling an increase in profit per unit sold is another achievement that underscores ongoing growth.
ONCI Price Analysis
The holding company has also embarked on an aggressive marketing campaign on social media as it looks to accelerate sales growth in a bid to net more profits. Declining debt levels is another development that underscores improved operational efficiency as the company seeks to streamline its books of accounts.
While ON4 Communications appears to be on the right track when it comes to operational efficiency and business development, its stock has continued to succumb to soaring short selling pressure. Over the past year, the stock has had to contend with subdued market activity arising from waning investors’ confidence.
ON4 Communications market sentiments also appear to have hit all-time lows given that the stock has struggled to bounce back and retake the $0.01 psychological level. However, if recent price action activity is anything to go by, then the stock might as well have hit bottom and due for a correction higher.
Short sellers are no longer interested in pushing the stock lower, given that ON4 Communications has continued to trade in a tight trading range for the better part of the year. With short sellers taking a break, a bounce back to the $0.01 mark could be in the offing on the company serving groundbreaking catalysts going forward.
What Does ON4 Communications Do?
ON4 Communications is a development stage company focused on providing wireless communication services to telecommunication companies. The company boasts of a platform that comprises of global positioning system device management as well as location-based services capabilities.
A recent corporate update to shareholders could as well provide evidence that ON4 Communications is not doing badly as echoed by implosion in share price. According to the Chief Executive officer, Steve Berman, the company is enjoying robust growth as depicted by another record quarter of sales growth.
Sales growth supplemented by a decline in operating costs has allowed ON4 Communications to generate more profits per unit sold. The launch of Facebook and Instagram campaigns has also allowed the company to generate more profits on being able to target a broader target market.
“We negotiated Delaware debt down and paid it off, leaving us available to move the company to Colorado which is also in the works. In addition, after the quarter ended we reduced the OS by 1.4 billion shares which is something we wanted to do for a long time,” explains Mr. Berman.
Gift Shop Development
On4 Communications has also confirmed it is progressing well on the development of its proposed GIFTCARDEXCHANGE.SHOP. According to the CEO, they have met web designers and set the groundwork for the development of the platform.
Once up and running, the company will have to verify the validity of gift cards, with retailers, before listing on the platform. In view of this plan, ON4 Communication has opened discussions with two large New York department stores to buy gift cards at a discount for populating and popularizing the platform.
“I will also be populating the site with $3,500 worth of gift cards that I have that I have never used; these include gift cards to Sephora, Dicks Sporting Goods, Ruby Tuesday, Target, Fridays, and a host of others.,” added the CEO.
On4 Communication is also planning to expand its toes into the healthcare sector. The company has already held discussions with three large care companies as it seeks to become their dental provider.
Underlying developments signal ON4 Communications is in a phase of growth as it continues to expand and strengthen its operation in new sectors. The fact that the company was able to post yet another record-breaking quarter on sales growth, as well as profits generated, is a development that points to a bright future.
Recent price action activity does not provide an accurate reflection of the company’s long-term prospects. With that in mind, the stock appears to have reached a bottom, as it is no longer trending lower. A correction higher could be in the offing.
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Disclosure: We have no position in ONCI and have not been compensated for this article.