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American Diversified Holdings Corp (OTCMKTS:ADHC) Is A Low Float Runner

American Diversified Holdings Corp (OTCMKTS:ADHC) Is A Low Float Runner
Written by
Jarrod Wesson
Published on
September 18, 2017
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Today, we need to talk about American Diversified Holdings Corp. (OTCMKTS:ADHC) since it has delivered an outstanding stock performance so far this year.The share price was just $0.0002 in January, but today, as of September 14, 2017, it is trading at $0.0017. For those who need a calculator, that is a 750% return in less than a year.Have a look at the most recent share price reaction in the following chart before we provide more details about the business of ADHC. 1 year chart for ADHCBusiness History What's the business objective of American Diversified Holdings Corporation?According to the documents given to the OTC Markets exchange, the company provides "executive management, corporate governance, administrative support, financial advice and introductions to capital sources to various micro-cap public companies that have proven revenues and business models."Additionally, ADHC claims to be working with "high growth businesses which all maintain a proprietary business model or technology." Furthermore, thanks to its forty years of business experience, management is said to provide public company knowledge and relationships needed to go to the next level for its clients.When was the company founded?ADHC was initially founded in 2001, but under a different name, Lasik America, Inc. In October, 2004, the name was changed to Critical Care, Inc. Finally, the company was called Cost Containment Technologies, Inc. until October 2007. What happened in February and September 2017? - Share StructureBy having a look at the stock chart, we can see that the most interesting share price reactions in 2017 were in February and September. The amount of shares exchanged were more than 100 million some days. Additionally, the company delivered big price gains for some astute penny stock investors.We researched the company's announcements on these specific dates, but we could not find anything remarkable that could make the company react. ADHC does not disclose a lot of information about its business. The quarterly reports are always released in due course of time, but no press releases are put out. Hence, we believe that the share reaction was created by someone outside the company.However, we did find an explanation in ADHC's share structure. The amount of shares outstanding is equal to 760,993,171, but the float is only 330,831,912 as of July 31, 2017.What does it mean?It means that the amount of shares owned by the public is very limited. Thus, if a shareholder wants to buy or sell a large stake, the market may not be able to absorb all the shares and the share price changes. Preferred sharesAre you one of those readers who are much concerned about the other type of securities sold by the company? No worries, we will provide all you need to know here:

  • 1,000,000 shares of Preferred shares A authorized par value $0.001 per share. 100,00 shares of Preferred shares A issued and outstanding as of July 31, 2016
  • 1,000,000 shares of Preferred shares B authorized par value $0.001 per share. No shares of Preferred shares B issued and outstanding as of July 31, 2016

Please note that we did not see any conversion features in these securities. Thus, they don't seem to increase the dilution risk of common shareholders.ConclusionCurrently trading with a market cap of $$1.1 million, ADHC is an interesting story among small caps. It seems that some smart market players are using this low-float company to play the volatility game. We believe that for this name, it is key to follow the amount of shares outstanding, the new capital increased, and capital reductions. Additionally, checking for new shareholders is also key. To sum up, be alert on this name, it may surprise again soon.We will be updating our subscribers as soon as we know more. For the latest updates on ADHC, sign up below!Image courtesy of FlickrDisclosure: We have no position in ADHC and have not been compensated for this article.

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