Nikolay Tomov
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ID Watchdog, Inc. (CVE:IDW), (PINK:IDWAF) Plunged on a Record Volume

by Nikolay Tomov Mar 25, 2011
ID_Watchdog_-_Chart_new.pngThis was a black Thursday for ID Watchdog, Inc. (CVE:IDW), (PINK:IDWAF). The stock of the company went sharply down on a record trading volume and on no negative announcements.

Yesterday, IDW plunged by more than 23% on a turnover exceeding 13.6M shares. ID Watchdog took the reward for being the most demanded item on the TSX Venture Exchange (CVE). Unfortunately, and to the disgrace of the company's managers, it was also among the largest price percentage decliners from the previous close.

The ferocious trading during the session ended with a profound victory of sellers, which simply swept over the buyers. Of course, this caused the huge decline in the share price. The future behavior of the stock is still hard to predict.

As there are no new company developments announced these days, we might suppose the fall of the shares has something to do with shorter's activity on the Canadian stock market.

The negative story does not end here. Watchdog's financials seem rather fragile and could hardly support an upward move of the shares. Early this month, the company closed a $3.1M private placement. Even so, Watchdog is in a shortage of capital, if we trust the filed financial statements of the company.

At the end of last September, the company reported only $234K in cash and equivalents, and a working capital deficiency of $4.2M. The above-mentioned financing of $3.1M will still not cover fully the capital shortage.

Looking from a different angle, however, ID Watchdog, Inc. might actually go better in the future. The company provides a variety of identity theft detection and resolution services primarily to individual customers on a subscription basis. If the clients remain pleased with Watchdog's identity protection solutions, this could mean better profits for the company.

ID_Watchdog_-_Logo.pngIn addition, last January Watchdog entered into a strategic partnership with the well-known AVAST Software by signing a product development and distribution agreement with the latter.

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