ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL (OTCMKTS:ZPAS) is a micro-cap momentum antacid sales driver (ie, shareholders are likely having a tough time keeping meals down of late). ZPAS stock is in the fintech space,and has seen both sides of the boom-bust cycle over the past month. The action had all the hallmarks of a promotional play as of a few days ago. And then we found out that such was in fact the case. But the story is still interesting, and we want to take a closer look.
For context, we recently covered a stock called Zenosense Inc. They, too, received the dreaded skull and crossbones from OTCmarkets.com (ZPAS was hit with this a few days ago). We explained in that article that ZENO’s mistake was its failure to quickly issue a press release and offer some kind of explanation. As such, that stock has been summarily murdered. ZPAS has quickly followed a better script, reassuring investors that the caveat emptor symbol was solely related to promotional activity by a third party, and that the company explicitly stands behind all of its public information, financial data, and press releases. Hence, we are seeing some life on the bid.
ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL (OTCMKTS:ZPAS) bills itself as a leading financial services technology company with a unique place in the Fintech space as both a financial platform provider with divisions in physical prepaid cards, financing enablement, and mobility products. Zoompass provides businesses and government tailored solutions to help digitize their financial transactions.
In the card sector, Zoompass offers complete program management services for a wide range of open loop Visa and MasterCard prepaid and virtual card accounts.
Zoompass enables businesses to provide their customers with a number of open loop card choices including, gift card, incentive cards, check replacement cards and online virtual card accounts.
The company also provides advanced mobile technology, enabling businesses to provide their customers with a white label mobile wallet solution, like Zoompass, with the ability to manage their card balances, bill pay, transfer funds and perform card to card money transfers in real time using their mobile devices. Zoompass’s mobile device division helps carriers and mobile device manufacturers integrate the financial platform technology into their offerings.
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As noted above, ZPAS stock was pounded last week in reaction to a notice from management that its shares had been the object of promotional stock activity by an unaffiliated third party. That was accompanied by the skull and crossbones caveat emptor symbol on OTCmarkets.com. However, in our experience, the fact that the company has been quick to explain the situation should stabilize shares.
“The Company supports the OTC Markets’ policy regarding promotional activities,” stated Rob Lee, Chief Executive Officer of Zoompass Holdings, Inc., “but we also strongly believe that our public disclosures are accurate and complete, and that they fully describe our commitment to our business plan and our progress in effectuating our business plan. We believe that any increased market interest in our securities in recent weeks is the result of those efforts and disclosures, and not materially related to any newsletters that may have been distributed by third parties. Our investors are encouraged to do their own research and not to rely on third parties, and we believe that our public filings and our website make it very easy for investors and potential new investors to do just that.” The Caveat Emptor symbol will remain on the Company profile until OTC Markets Group believes there is no longer a public interest concern, and we will work with OTC Markets diligently on that front.
That said, the style of movement we had seen in the stock’s run-up from $2 to $3.70 over a couple weeks’ time had a familiar feel to it: it looked and felt like a pumped-up stock. The danger now, given that, is that this primary driving force may now be absent in the stock’s tape in future trading, leading to a very different outcome in price discovery.
Now commanding a market cap of $78.6M, ZPAS has about $90k in cash on the books according to what we could dig up, which must be weighed relative to about $1.85M in total current liabilities. ZPAS is pulling in trailing 12-month revenues of $88K as of quarter ended September 30, 2016. As noted above, the company stands behind this data. For continuing coverage on shares of ZPAS stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!