Saturday, June 25, 2022

APT Systems Inc. (OTCMKTS:APTY) Jumping On the Fintech Bandwagon

APT Systems Inc. (OTCMKTS:APTY) is a “fin-tech” stock that’s been powering in an uptrend for the past two weeks, boosted mainly by reports that the Company’s CEO announced plans to buy as much as 3 mln shares on the open market. We’ve witnessed 260% piled on for shareholders of the stock during the trailing month, with a jump of nearly 500% in transaction volume during that move.

With a tight float size (fewer than 18M shares) and a promise (threat?) of a large single purchaser, we are seeing a dramatic bounce in recent days.

APT Systems Inc. (OTCMKTS:APTY) trumpets itself as a company that focuses on the creation of stock trading platforms, financial apps, and visualization solutions for charting the financial markets. It also provides technical writing and computer assisted design services to other startup companies. APT is an acronym for Applied Proprietary Trading.

APT Systems, Inc. was founded in 2010 and is based in San Francisco, California.

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As a Wall Street Journal article put it a year ago, “DIY’s newest frontier is algorithmic trading. Spurred on by their own curiosity and coached by hobbyist groups and online courses, thousands of day-trading tinkerers are writing up their own trading software and turning it loose on the markets.”

In simpler terms, we all know the success of products such as Tradestation and the need for discount retail brokers such as eTrade, Ameritrade, Scottrade, and the like, to include resources for technical traders and systems development. APTY is out for a piece of that action.

However, as the company notes on its website, “the steps remaining for the company to begin selling its products are to finalize the programming of the software used in its products, specifically its apps with trading tools, and then commence its sales and marketing campaigns. We are working on plans for two financial apps.”

If you have ever been involved in a startup developing software, then you know how important it is to be fully financed through not just your dev date (when you have a fully beta-tested and working product), but through all marketing expenses.

It’s a red flag to see APTY discuss its phase as still including additional programming before we even get to ‘go to market’ expenses, and yet, to see basically no cash on the books at present.

In any case, the idea is certainly interesting. We know that the concept of algo-driven and quantitative market strategies is something with mainstream chops, and our sense is there may be a market here. But we’re not sure it’s all that easy to join the CEO, Glenda Dowie, in her announced intention to “strengthen her investment in the Company with the purchase of free-trading shares in the open market.“

She went on to say, “My recent decision to acquire shares from the open market illustrates the level of confidence that we have in our commitment to building a solid foundation that can only bolster shareholder value. The Directors firmly believe that, at this stage, the Company is significantly undervalued. We are determined to fortify our structure in a continual effort to bring the share price into alignment with the Company’s intrinsic value and real growth potential,” said Ms. Dowie.

Dowie advised she may continue to purchase additional Company shares in subsequent open-market transactions up to an aggregate of 3,000,000 shares at her discretion. She concluded: “The ongoing purchase of these shares represents my unwavering faith…”

Yes. Refreshing. Okay. But, the press release then stumbles as it goes on to compare Ms. Dowie, the CEO of a fledgling pre-revenue startup with a market value of barely 7 digits, to Jamie Dimon and Michael Corbat. Seriously?

As noted, at this time, carrying a capital value in the market of $1.9M, APTY has almost no cash on the books, in a pool of total assets of $98K, and a potentially manageable $200k in debt. But we are not on the market and have no revenues to boost resources organically (ie, this is not yet a company with a track record of execution).

Furthermore, the public has had no chance to evaluate the products, and we have had no chance to evaluate that evaluation.

In other words, the only proof point here for APTY at present is the CEO’s hardly disinterested gesture of faith. Incidentally, the cost of 3m shares at the stock’s recent 2-week VWAP: $15k. So, we will be watching for actual app releases and some type of additional large scale funding before telling you that APTY is “game on”. To get the full story on APTY subscribe below to Oracle Dispatch right now.

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