Will Reverse Split Do Any Good to This Penny Stock?

AVCT Stock Forecast: Will Reverse Split Do Any Good to This Penny Stock?

AVCT Stock Forecast: Latest Price

AVCT Stock Forecast: Recent Performance

5 days 1 month YTD
  AVCT 12.0% -35.1%   -88.3%
 NASDAQ  -94.1% -12.8% -93.6%

In the last three months, the stock reached its highest price of $0.46 on 31st August and its lowest at $0.136 on the 25th of August. It performed well at the beginning of June with the stock prices ranging from $0.3785 to $0.4233 whereas it performed poorly in August with prices ranging from $0.136 to $0.186. A major decline of 91.4% in the stock price is due the inflation, war, and, overvalued assets.

  1. When AVCT acquired Kandy solutions in December 2020, the company was expected to see solid growth in the market from $58billion in 2021 to $100billion by the end of 2025 and also expected its revenues to grow from $14.3 million in 2020 to around $18.8 million in 2021 and over $37million in 2022.
  2. Due to the pandemic, everything became remote and the world is heading towards virtualization which increased the demand for cloud communications. So, the company identified the potential of cloud services and expected to grow the same.
  3. But unfortunately, AVCT did not see huge growth in its market with its revenue down 24.84% year over year from $4.95 million in June 2021 to $3.72 million in June 2022.
  4. It is still considered a penny stock by some due to its low stock price, which is less than $5.

AVCT Stock Forecast: Latest Video

YouTube video

AVCT Stock Forecast: Recent Happenings

  1. On September 7, 2022, the Compensation Committee of AVCT, initiated the Key Executive Incentive Plan (the “KEIP”), which gives cash bonuses anywhere between 3.5% to 4.5% based on the performance of the Company’s senior executives.
  2. On August 26, 2022, the company made changes in its executive and board teams where Kevin Keough succeeded Darell Mays as CEO and the latter took the position as executive board vice chair. AVCT has also initiated a review to know the sale of the entire business or any selected assets.

Will Reverse Split Do Any Good to This Penny Stock?

AVCT announced on September 29th, 2022, a reverse stock split for the outstanding shares in the ratio of 1 for 15. The reverse stock split will be effective from September 30th, 2022, and the stock is expected to trade on a reverse split-adjusted basis from October 3rd, 2022.

The share price as of 29th September closing hours is $0.30 and is expected to open around $4.5 on 3rd October 2022.

A reverse split does not change the market cap of the underlying company and is adopted by the company to avoid delisting from the exchanges as a share price below $1 for more than 180 days can prompt Securities and Exchange Commission to delist the stock.

Long-Term Investors Should Avoid Meme Status of AVCT

Recently, the share price of AVCT has surged more than 100% in the last month. It was trading around $0.15 on August 26th and from there it went to $0.46 on 31st August 2022. It definitely indicates that it is catching the meme status again on the Reddit platform. According to WSBTrackers.com, discussion on AVCT stock made up to 5% of daily activity a few weeks ago. This meme status is against the backdrop of important announcements made by the company on August 25th, 2022. The announcement was regarding the change in the management team and corporate board and most importantly plans to review “strategic alternatives”. Strategic alternatives signals towards possible sale/merger. The traders believed that a takeover at a big premium is just around the corner. The company received a similar buyout offer in 2021 at $9 per share which was rejected by the company.

Such a takeover is not easy now, as the share price has fallen to a much lower level as compared to January 2021. Moreover, the company’s share count has increased multifold since 2021, due to multiple stock dilutions. In early 2021, the company had 19.75 million shares outstanding, and today it has more than 140.3 million shares. In addition to it, massive interest rate growth since 2021 has also affected the valuation of the company to a large extent.

A reverse split is not taken in good spirit by the overall market. It just signals the fact that something is not right with the company. AVCT is no different. Gaining meme status at such a low share price is also reasonable as some traders want to make a quick buck by fooling the larger pool of long-term investors. But there is no materialistic evidence that the company is on the right path and hence long-term investors must avoid this share.

AVCT Stock Forecast: 1 Year Target

1-year target estimation   $7

Also Read: MULN Stock Forecast

AVCT Stock Forecast: Technical Recommendation

AVCT Stock Forecast:  Latest Tweets

AVCT Stock Forecast: Q2 Results

  • AVCT’s total revenue was declared as $3.72 million in the second quarter, which has fallen by 83.5% year over year.
  • The company’s loss from continuing operations is at $24.0 million, up 105.6% year-over-year. Its loss per share is $0.08, up 89.7% year-over-year.
  • Its gross profit margin is -41.07%. Its diluted EPS is -0.08 which is up 63.64% year over year. Its operating income is -$13.5 million which is down 17% year over year.

AVCT stock forecast: Conclusion

As the company is expected to be acquired by any of the large cloud companies along with major changes made in the management and board of directors team such as appointing the new CEO, the stock can grow, but one should be mindful that it comes with many risks.

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.

Bommu Vaishnavi

AVCT stock forecast

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