Is the Long-Shot Bet Starting to Pay Off in InterCloud Systems Inc...

Is the Long-Shot Bet Starting to Pay Off in InterCloud Systems Inc (OTCMKTS:ICLD)?


If you’re into left-for-dead, turnaround, lotto-ticket, Hail Mary style trades, then InterCloud Systems Inc (OTCMKTS:ICLD) might just be for you right now. The stock vaulted higher on Tuesday, ramping as much as 300% higher during the session. The move came in response to the following: The company announced $5.2 Million in net income for the first quarter of 2018.

That’s a rather big deal considering that this company has been losing money at a wild clip over recent quarters. The stock is presumably ramping on the idea that, if this were to be the first among a string of net income positive quarters, the balance sheet issues that have been plaguing this stock for years could suddenly find a very different light. And in that new light, the sky could be the limit. Time will tell. But it’s certainly worth keeping an eye on.

InterCloud Systems Inc (OTCMKTS:ICLD) offers cloud data and network management and security to telecommunications companies. That’s the gist here.

As ICLD the story, it provides “end-to-end IT and network solutions to the telecommunications service provider and corporate enterprise markets through cloud platforms and professional services in the United States and internationally.”

InterCloud operates through four segments: Applications and Infrastructure, Professional Services, Managed Services, and Cloud Services.

ICLD offers various services, including platform as a service, infrastructure as a service, database as a service, and software as a service; and network management, 24x7x365 monitoring, security monitoring, and storage and backup services.

It also provides software-defined networking (SDN) training, SDN software development, and integration, virtualized network functions validation in a multi-vendor environment, unified communications, interactive voice response, and session initiation protocol based call centers, as well as structured cabling and other field installations.

According to company materials, “ICLD is a leading provider of cloud networking orchestration and automation, for  Software Defined Networking (SDN) and Network Function Virtualization (NFV) cloud environments to the telecommunications service provider (carrier) and corporate enterprise markets through cloud solutions and professional services. InterCloud’s cloud solutions offer enterprise and service-provider customers the opportunity to adopt an operational expense model by outsourcing cloud deployment and management to InterCloud rather than the capital expense model that has dominated in recent decades in IT infrastructure management.”

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The chart shows approaching 240% added to share values of the company over the past week of action, but that move comes in the context of a larger bearish trend. Moreover, the listing has witnessed a pop in interest, as transaction volume levels have recently pushed just under 370% beyond its prior sustained average level. It pays to take note of this fact due to the tiny float size in the stock (of just 16M shares). One is wise to respect the dynamic this may create — a restricted trading float and a jump in trading volume can crimp supply and push share prices higher.

Mark Munro, CEO of InterCloud stated:  “We continue to secure new purchase orders and scale back on expenses.  We achieved our goal of profitability in the first quarter.  We are focused on driving profitable next–gen Wi-Fi and DAS business as well as adding customers to our SDN Wan and SDN Orchestration platforms throughout the year.”

At this time, carrying a capital value in the market of $1.2M, ICLD has a stash ($681K) of cash on the books, which stands against about $11.2M in total current liabilities. ICLD is pulling in trailing 12-month revenues of $34.5M. However, the company is seeing declines on the top-line on a quarterly y/y basis, with revenues falling precipitously in recent quarters. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $ICLD stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $ICLD, either long or short, and we have not been compensated for this article.

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