This stock has been pumped and dumped. There is no debate here. It is not often that a stock loses 80% of its value from the peak. (250 to 50).
A stock is said to have been pumped and dumped when:
- The price goes up on new contracts’ announcements and new revenues booked that essentially do not exist (for an extended period of time at the least and both retailers and operators contribute to this phase as retailer investors are convinced about the existence of pipeline of new revenues as that is what the company has communicated to them/the exchange). This occurred between July 2016-Feb 2017 (BSNL announcement was made at the end of June 2016). This is the “pump phase”
- Is dumped by those with insider information (operators like AKG Finvest, UNO Metals, Calcutta Stock Exchange etc.) on retailers who are convinced that revenues recognized/contracts continue to exist. This occurred starting as early as July 2016 till now.
The dumping in this case has occurred for an extended period because the company did not disclose important information on time. (like BSNL standoff, non-existent BSNL revenues/non-existent pipeline of new revenues etc.) The delay in disclosures ranged from 3 months to more than a year, which led to retailers to buy the stock on a continuous basis. This makes the company/promoters untrustworthy.
While we are facing the brunt of this pump and dump process, we (including myself) should hold ourselves responsible for this sub-standard investment. If we are not accountable for our money, then who should be?
My opinion here is that the stock price may go up and we might get a significantly better price to sell the shares, as the revenues booked excluding BSNL do exist, and I still think it is difficult to fake the existence of a software product.