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On4 Communications Inc (OTCMKTS:ONCI) Gets Crushed

On4 Communications Inc (OTCMKTS:ONCI) Gets Crushed
Written by
Alex Carlson
Published on
June 29, 2016
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InsidrFinancial

To say June 28th was a bad day for shareholders in On4 Communications Inc (OTCMKTS:ONCI) is an understatement. It shouldn't have been a bad day because ONCI was being recommended by the powerful newsletter group Epic Stock Picks and their sister newsletters Wolf of Penny Stocks and Stock of the Week. They are known for their big following and generating hundreds of thousands of dollars in volume. They also attract a fair bit of shorts and that has hurt some of their deals in the past.So what happened with ONCI? Our guess is that someone knew the Wolf was coming in and decided to unload their position onto the Wolf's flock. Most likely, the seller's are unhappy with the company's decision to reduce its authorized share count. Maybe it was a warning to the company because in the press release, ONCI said that it "will be filing the necessary paperwork with the State of Delaware to reduce ONCI's authorized shares to 3.75 billion shares, which is a reduction from the current 5 billion shares currently authorized. The company had previously stated in a letter to shareholders that it would be reviewing the authorized shares in order to determine a balance between immediate shareholder interests while allowing room for strategic acquisitions. Just over 1.5 billion shares are restricted of the issued and outstanding."Now notice that it said "will be filing" and not "filed." There's, a big difference here. The company is making its intentions known, but hasn't said that it has followed through. Our guess is that there are some large shareholders in the original shell that don't want to see the share count cut as that would be less shares they can sell into the market. And when it comes to selling a microcap like ONCI, sometimes the only way to get out is when there's a bid and there certainly was a bid yesterday from the Wolf's followers.Now many are left nursing 50% losses on their purchases in just one day. Making matters worse is that the chart looks horrible. ONCI recorded an outside reversal. This is a price chart pattern in which a security's high and low prices for the day exceed those of the previous trading session.The key for investors to understand is that ONCI looks to be a ground floor opportunity. The company aims to be a holding company of healthcare-related companies that ONCI plans to both start and acquire. It's being lead by CEO Steve Berman who grew marketing income from $11 million to over $100 million for Time Warner New York. In his letter to shareholders, highlights included:

If there is one thing that I hope this letter communicates it is this: I am not thinking small. I am thinking big and disruptive and over the next few weeks information will be unveiled that brings this fact into clearer focus. One of the reasons I chose to go the public route with this company is the leverage it afforded me to acquire companies through strategic share deals. Because of my proven business background I believe that I will identify and secure a portfolio of profitable healthcare companies that add tremendous and immediate value to the parent Company. On4 is my baby that I plan to nurture and grow and then in the not-too-distant future walk her down the aisle. I genuinely hope that you will be a part of this adventure.

ONCI says that it is currently working to build what the company believes will be a disruptor in the dental and elderly care industry as the industry currently exists. The CDC reports that in 2014 there were 15,600 elderly homes in the United States with 1.7 million licensed beds. In these elderly facilities there exists a huge void in proper dental hygiene services. The company is developing and building the business model whereby equipment will be transported inside elderly care facilities so patients do not have to risk going outside the elderly care facility to receive much needed dental care. ONCI says that it currently has contracts being negotiated with facilities in New York, New Jersey, Connecticut, and Florida.Currently trading with a market cap of $652k, ONCI is a new story trading on the OTC Markets. Shares were climbing up the charts last month, only to get slammed back down this month. Right now, everyone is betting on CEO Steve Berman to deliver and turn things around. Judging from his track record at Time Warner New York, we won't count him out. We will be updating Insider Financial as soon as we know more. For continuing coverage on ONCI, sign up for our free newsletter today and get The Insider Financial Guide To Penny Stocks as an added bonus!Disclosure: We have no position in ONCI and have not been compensated for this article.

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