It's probably a pretty safe bet that Epazz Inc. (OTCMKTS:EPAZ) isn't a familiar name to most long-term investors. For that matter, EPAZ isn't even a familiar name to short-term traders. Both groups may want to put the stock on their radar though (for different reasons), as the recent action evident on the chart suggests something is brewing here.
EPAZ designs cloud-based applications solutions, mostly for businesses. While revenue has never been significant - the company generated $1.2 million in sales last year - that top line has been steadily growing for several years. And, with a market cap of only $3.05 million, it's not like Epazz should necessarily be doing more.
Regardless, something's clearly changed with Epazz Inc. lately... something encouraging. It's all on the nearby chart. As of late June, the market was content to let the stock slowly disintegrate into oblivion. Shares had drifted from $0.002 to a low of $0.0006 by early July, and there was little to stop that deterioration. And then on July 9th, lightning struck. That's when EPAZ shares reversed course on, of all things, a report pointing out that a big chunk of its float had been sold short... a bet that the stock's price will go down rather than up. Though bearish on the surface, it's got a bullish silver lining in that all those short trades can only bear a profit if the short-sellers buy shares back, creating (ironically) bullish pressure on the stock again.
By the 10th we learned what else may have been at play in support of EPAZ shares - a block of convertible notes were paid off before being converted, wiping away some potential dilution. By the 11th we learned that Epazz Incorporated's assets (its software library) had grown more than 30% on a year-over-year basis. Since this software is revenue-generating, the more the company has to offer, the more revenue the company creates. On the 16th, the company putting the finishing touches on what ended up being a game-changing wave of news. Epazz officially said it had become a holding company looking to acquire smaller software properties and companies it could use to widen its monetizable asset base, or cultivate and then sell for a profit later.
In other words, EPAZ is (though these aren't the company's words) an incubator - a business model that can offer shareholders far more short-term rewards, via cash driven by spinoffs of companies that Epazz has bought and then refined.
Whatever the reason, the market responded in kind, pushing the stock up and above several moving average lines. The surge today has pushed shares all the way above the key 50-day moving average line, which up until this point had been a ceiling. It's a key technical catalyst though, and now that the 50-day line's been hurdled the fireworks can really get started. There's already a relatively big bullish following too, given the way volume has ramped up along with the stock. These traders and current shareholders should be able to keep the buzz growing for a while.
The bottom line is, Epazz Inc. was always a compelling company - it just needed to position itself differently in the market's eyes. The last several days have done just that, and the benefit is clear. Though still speculative, there's a lot of upside packed into the situation.
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