ARCO RESOURCES CORP. (“ARR”) Arco is another of the TSX.V listing that doesn’t look like it can shift itself out of neutral. Over the past number of months it has managed to maintain its shares in the low pennies range.
The bulk of Arco’s news releases over the past year have focused on debt financings and routine filings of required financials. In its most recent financials dated October 31, 2015 the company had $600 cash in the bank and several hundred thousand dollars of liabilities. Not exactly an enviable position these days. Over the longer term, adjusted for rollbacks it appears Arco has fallen from the $18.00 range to as low as two and half cents, not far from its current price of three cents a share. The company was trashed in the 2007 market collapse and never really recovered. The shareholders were delivered two back to back rollbacks in 2014; the first was 10 shares for 1 new and the second was 3 shares for 1 new. That is a combined 30 for 1 new rollback in 2014. Each 1000 shares would have been reduced to a measly 33 shares and no improvement in share price to note. Our guess is there were many peeved off shareholders and still are, which means they will continue to sell every opportunity they get. The company seldom trades, as we often say in the business, it trades by appointment. This means no exit ability for investors. The company announced a financing and yet another debt settlement for 5,000,000 common shares on January 14, 2016 only to turn around on January 25, 2016 to modify the debt settlement to pay certain creditors 5,000,000 warrants on top of the initial 5,000,000 common shares. In its January 14, 2016 news release Arco also announced the appointment of Anthony Dalton as CEO, however since Mr. Dalton was already on the Board of Directors since 2011 we do not really expect the appointment to alter the culture or success of the company. Arco is probably a good bet to remove from your watch list for the time being and perhaps revisit when the company brings in some people who may be able to establish a new strategic plan that does not require rollbacks, can produce a liquid market and can deliver to projects of merit to the company. For the time being finds Arco ignorable.