Gediminas Jasionis
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Government Contract Gives Selectcore Ltd. (CVE:SCG) (PINK:SLXXF) Stock A Temporary Boost

by Gediminas Jasionis Mar 14, 2012
scg_chart.jpgSelectcore Ltd. (CVE:SCG) (PINK:SLXXF) share price went up after the company disclosed to have signed a new contract with the government.

SCG was up 12.2% under a trading volume of 986 thousand amid the session today. The spike in price came unexpectedly since the technical situation suggested SCG should continue to fall as it had broken support at 25 cents per share.

The news that caused it to bounce announced the company has secured a significant government contract related to their telecom business. The agreement was initially made for three years with an option to extend it for another year afterwards.

Details of the agreement were not yet disclosed but should be made public over the coming 90 days. This means the bullish share price action isn't likely to continue because the financial impact of this contract remains a mystery.

9selecore_logo.jpgSelectcore operates as a provider of telecom and financial services. The company also undertakes to process transactions for the under-banked consumer market.

The company had financial problems over the recent year. Their revenues gradually dropped while losses grew to over $1.1 million per quarter. This naturally increased their dependence on capital raise when selling stock and in turn increased the dilution rate for existing shareholders.

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