TRKA - Game over for Troika Media Group (TRKA) as its stock melts
2023-12-07 08:35:45 ET
Troika Media Group (NASDAQ: TRKA) the wildly popular penny stock is in its final days after the company filed for bankruptcy protection as I predicted in May. The announcement came a month after the firm issued a going concern warning. As a result, the TRKA stock price plunged by over 70% in the pre-market session, a day after it jumped by over 44%.
The main catalyst for the TRKA stock price was the company’s decision to file for Chapter 11 protection and the sale of its entities to Blue Torch. In this process, its secured lenders committed to provide $11 million of debtor-in-possession financing. It hopes that these funds will be enough to cover its operations through the restructure process. In a statement, the CEO of Troka said :
“We expect that the process will be relatively short and that the Company will have adequate liquidity to operate the Converge business normally throughout the process. We anticipate that the Company will emerge from Chapter 11 as a private company with a stronger balance sheet.”
Troika Media Group has been a cash incinerator for a while. A closer look at its balance sheet shows that the total cash and short term investments have been in a downtrend from $42.4 million in March 2022 to over $18.4 million in the last quarter. It had over $64 million in long-term debt while its total net loss in the past five quarters stood at over $55 million.
Troika Media has also been highly dilutive as the total outstanding shares jumped to over 16.67 million from just 1.58 million in 2021. This means that the company’s investors have lost money as its stock crashed and as the dilution continued.
For starters, Troika Media Group is a company that offers brand building and activation, marketing, and other strategies to other firms. The TRKA stock price has been in a freefall after going public in 2021 when it peaked at $100.02. Its total market cap plunged from over $200 million to less than $30 million.
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