x min read

TANKE ORD (OTCMKTS:TNKE) Spikes Higher On Reverse Merger Deal

TANKE ORD (OTCMKTS:TNKE) Spikes Higher On Reverse Merger Deal
Written by
Jarrod Wesson
Published on
March 26, 2018
Copy URL
Share on LinkedIn
Share on Reddit
Share on Twitter/X
Share on Facebook

TANKE ORD (OTCMKTS:TNKE) is ticking up after a series of positive news that seems to have triggered increased trading activities on the stock. Investors’ confidence in the stock has received a boost due to signing a merger by the company with Greener Environment & Yulong LLC and after it received an investment commitment of $2.5M from a private investor in China. Logo - TANKE ORD OTCMKTS: TNKEAfter the positive news recently received, the market will be very alert on the price action, as it will determine the future stock performance in the new year 2018. We will provide all the new details in this article, but first of all, check the past price action in the stock chart below: 2 months chart for TNKEWith the stock trading at the $.0024 candle, a close above $.0034 would strengthen market sentiments and affirm the upward trend. Perhaps, the market needs to receive additional positive news to attack those price levels. Thus, we encourage readers to stay tuned. On the downside, if the stock closes below the $.001, it would be very negative for the stock, as this is a critical price resistance. While downward movements can happen, we believe that they are quite unlikely. Take into account that the trading volume is close to 52-week record highs, which means that there exists buying pressure at the $.0024-0030 range.The merger with Greener Environment & Yulong LLCAfter the deal with Greener Environment & Yulong LLC, we will be expecting TNKE to continue the business model of Greener. This is the way the companies bill this new business:

"Specializes in consulting environmental technology transfer into the international markets and is one of the leading manufacturers specializing in making of industrial environmental friendly equipment. It is a large specialized environmental company combined design, supply, installation, commissioning and operation into one." Source

For the starters, Tanke Inc. is a holding company developing and financing emerging companies like Greener. It is headquartered in Nevada and was founded in 1984. According to the terms of the merger agreement, both companies will maintain their respective names, but both will consolidate regulatory charters with Greener Environment & Yulong LLC merging into Tanke Inc. We appreciate this plan since TNKE is an old entity, so losing this brand would not be ideal.The fact that the merger has not been closed yet brings an interesting opportunity. The market has celebrated the announcement by pushing up the share price. Thus, we expect more price rebounds when the merger closes. Readers need to take into account that the deal is subject to regulatory approval and approval by the shareholders of Tanke Inc. In our opinion, once those conditions are waived, the share price could run.Good news: the company will not execute a reverse splitGiven that we are talking about a penny stock, the financing community is telling that a reverse split is likely. In our opinion, such a corporate decision would be quite detrimental to current shareholders and should be avoided. TNKE should create value for the shareholders and forget about tricks to increase the share price. In this regard, we need to remind everybody that no plan exists to reverse split; it is quite important:

"Company has no plans to Reverse Split. Merger is in progress Shareholders and the investment community will hear from management in the coming days via filings. All previous acquisitions and contracts are still active." Source

Financing and More AcquisitionsOn March 15, 2018, the company noted an investment commitment of $2.5 million from a private investor in China. This is again quite positive news. We believe that the recent merger and the future plans of the company seduced international investors, who are providing more money for the new projects. While the amount of money received is not significant, yet the fact that foreign investors trust the company is very beneficial.The best is also another fact. In the press release that announced the new debt, TNKE provided information about the use of the funds. This is what the market needs to know:

"We will use these funds to Acquire planned acquisitions. We are staying the course for our growth initiative and development plans. Management plans to rapidly grow the company in 2018." Source

What's our take? The company seems to be planning new acquisitions and has now cash in hand. In our opinion, we will not have to wait a lot until the company releases new transaction. As usual, they could make the share price rebound. Taking into account that new acquisitions mean more future revenues, a bigger company, more employees, and better credit; this is a name to follow closely from now on.ConclusionWith a market cap of $1.5 million, TNKE could be an interesting small cap story for the year 2018. The company made revenues of $2.5 million in 2015 and $5.0 million in 2014, thus we are expecting similar results for 2018. Additionally, the last balance sheet showed positive net assets of $2.5 million, so it is interesting to get to know the current financial state of TNKE. Please take into account that net asset per share was equal to $0.0037, as there were 664,833,402 shares outstanding. The current market price is trading below its book value per share. The next necessary move should be uploading the new financial statements, which could also be celebrated by the market. This is what everybody is waiting for after the recent merger since we will be able to discover the new assets owned by TNKE.Disclosure: We have no position in TNKE and have not been compensated for this article.Image courtesy of Arya Bimo via Flickr.

Discover Hidden Gems

Don't miss the next big opportunity. Subscribe for timely alerts on potential market movers.