UnifiedOnline Inc (OTCMKTS:UOIP) Rockets Up The Charts

UnifiedOnline, Inc. (OTCMKTS:UOIP), the Internet and cloud computing application provider, surprised the market in the last week by running up the charts. The company's share price was not volatile in the year 2016 after a previous decline. We could say that 2016 was a consolidation period and just last week we saw a break out. To be honest, this latest move is very difficult to explain. The company did not issue any press release or any document to the OTC Markets website, so we cannot really tell what happened. The investment community was wondering about the same thing. Have a look at the Yahoo Finance Forum. In this article, we will explain the business of UOIP and try to assess different options to explain the recent price action.SourceCompany historyThe company was created after the acquisition of 100% of the outstanding stock of Computers and Tele-Comm., Inc., a Missouri corporation, and its wholly owned subsidiary, KC NAP, LLC in exchange for 23,921 shares of common stock. Additionally, the company issued shares to pay its debts, which totaled $267,978, in exchange for 33,714 shares. Consequent to this transaction, the company started operating data centers and providing Information Technology services. On March 4, 2013, the company announced that it would merge with Storage vendor IceWEB. With this new business transaction, the company started to provide cloud application services, and cloud storage services that include file sharing and collaboration services.How do we explain the spike?# First option: WannaCry ransomware attack?Let us provide some background about the WannaCry ransomware attack, which impacted the entire world. On May 12, 2017, some big organizations, such as Britain's National Health Service, FedEx, and Deutsche Bahn, reported that a large number of computers had been attacked by a virus that had encrypted the information stored. Hackers demanded $300 to $600 from each user to recover the encrypted files. This was the photo that the user could see and also the payment window:SourceThe virus attacked windows systems that had not been updated and did not include a "critical" patch that had been "issued by Microsoft on 14 March 2017 to remove an underlying vulnerability ". Many organizations, which were not secured, suffered the attack that spread all over the world in the following days. Experts estimate that over 200,000 victims and more than 230,00 computers were infected. The virus did not slow down its activity until approximately May 19.SourceLet's focus on the market now. According to Forbes, the market priced the attack by pushing up cybersecurity companies:

"Companies that saw their stocks jump the most following the hacks though were Mimecast(11%), Sophos Group (7.8%), Proofpoint(7.3%), and Fireeye (7%)" Source

We went to check for example the Sophos share price reaction:SourceThen, we went to see how UOIP share price reacted to event and noticed that the movement was very similar. The team did not really understand why traders were pushing up the UOIP share price until we studied the great details of IceWEB's activities. The business activity of the company's subsidiary reads as follows in the annual report:

"In addition, through our IceWEB Storage Corporation subsidiary we deliver on-line cloud computing application services, other managed services such as Disaster Recovery, Archive Storage, Redundant File Storage, Redundant Broadband Services and Business Continuity Services." Source

We contacted an expert in IT consulting to fully understand the term "Disaster Recovery". We learnt that it was exactly the service that companies attacked by WannaCry would require in order to restore the files lost. Hence, we believe that the virus may have caused the spike in UOIP, as it did to the cybersecurity companies.# Second option: a bigger corporation buying out the company to acquire the know-how?According to the most recent report, the company showed large amount of intangible assets on the balance sheet; $5,049,383. Just to give you an idea, the total amount of assets is approximately $5.2 million. Hence, the most important asset is this one. It is very difficult to estimate whether these assets are fairly valued. Usually, companies can capitalize the R&D invested to obtain the patents. But, intangibles can also be obtained through acquisitions and we believe this is the case. Could a company purchase UOIP to buy these intangible assets? Yes, absolutely, only experts know the true value of such information and know-how in the market. The potential profit can be substantial if a company is interested in UOIP's technology.#Third option: organic growthAnother possibility is that the company would have obtained a contract from a big customer. Again, in this case, the news would be put out soon. Hence, we encourage email subscribers to stay alert.Conclusion and final warningSince we did not find recent news put out by the company that could justify the recent spike in the share price, we tried to identify several options. First, the most likely option may be the fact that the company owns the know-how when a virus like the WannaCry destroys storage data in an organization. Just as it happened with cybersecurity companies, UOIP share price may have been positively affected by this very recent attack. Second, the valuable intangible assets owned by the company may interest a big company, which may be negotiating a sale. Finally, a contract signed with a big customer would also be a possibility.SourceThe recent spike has returned substantial amount of money to a number of our readers and subscribers. However, investors need to be careful. The company is flagged by the OTC Markets exchange with the “Caveat Emptor” sign, which means that shareholders need to "exercise additional care and perform thorough due diligence before making an investment decision in the company". We will be updating our subscribers as soon as we know more. For the latest updates on UOIP, sign up below!Disclosure: We have no position in any of the securities mentioned and have not been compensated for this article.