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By Boyan Angelov
Sep 15, 2014

Aspen Group, Inc. (ASPU) Crashes After Presentation

Aspen Group, Inc. (ASPU) suddenly exited obscurity earlier this month. After trading at very low levels for quite some time, the ticker made its way up the charts after a few items of news from ASPU turned some heads. The price of the penny stock's shares went from $0.142 on September 3 to $0.36 on September 10. The last couple of sessions, however, saw a crash for ASPU, as the ticker lost $0.13 in price, eventually closing at $0.23 at the end of the trading week.

The volume remains high, so it is early to make conclusions on the future of ASPU just yet. Fluctuations tend to happen for OTC pink sheets and a sudden rise is often followed by sharp corrections. The recent events that caused the movement of ASPU's stock in the charts should be evaluated separately.ASPU_chart.png

For starters, the initial item of news that got ASPU on the radar was a press release from September 4, in which the company announced that it had closed on a $5,4 million equity offering with institutional and accredited investors. The company stated that it plans on using part of the proceeds for the early retirement of due debentures.

An 8-K from the same day gave the information that ASPU had raised $3,766,325 from the sale of 24,298,877 shares of common stock and 12,149,439 warrants exercisable at $0.19 per share for a five-year period. A press release from September 9 gave more input on the sale. It was reported that infamous investor Mr. Leon Cooperman had bought 11,241,435 common stock shares, thus becoming a holder of 9.99% of ASPU's O/S.

The company seemed to have high hopes for the presentation that took place at the Convene Times Square on September 11. ASPU issued a second press release prior to the event, containing more details, and after the event took place, an 8-K containing the presentation was filed. The sought effects were not achieved in the least bit. Instead of keeping its momentum and perhaps progressing further up, ASPU crashed after the SeeThruEquity conference.

Looking at the presentation, a piece of information that stands out is the increased number of outstanding shares. The presentation stated that as of September 8 ASPU had 112,7 million in O/S which is a 50% increase in the amount of the 75,113,869 common shares the company had by July 28 according to its 10-K for the period ended April 30, 2014. The report also lists rather unstable financials:

  • Cash: $247,3 thousand
  • Total current assets: $1,8 million
  • Total current liabilities: $3,5 million
  • Revenues: $3,9 million
  • Net loss: $5,3 million

Though ASPU has been generating high revenues in the past few periods, the company has ended all of them at a high net loss. The venture's liabilities have increased significantly and are nearly twice as much as its assets by now.

ASPU_logo.jpgIt remains to be seen how ASPU's roller coaster ride will proceed in this trading week. The recent exposure at the SeeThruEquity conference did the venture no favors, unlike another penny stock, AMP Holding, Inc. (AMPD), that benefited from the recent exposure provided by the independent equity research firm. AMPD also took part in the conference held on September 11. The company was recently given a good evaluation by SeeThruEquity and will continue to be followed in the future, as stated by the firm's CEO Ajay Tandon.

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