Audio Pixels Shares Up 18% – Time to Venture Into Small-Caps?

Digital transition loudspeaker maker Audio Pixels Holdings [ASX:AKP] jumped more than 18% today to $22.45 per share. The recent jump gives shareholders a 58% return year-to-date.

What caused AKP shares to jump?

This morning, AKP, together with MEMS vendors, announced the completed development of its production process.

Management is extremely happy with the outcome. The production process will reliably enable AKP to enhance devices with its technology.

What will happen to Audio Pixels now?

For FY16, AKP generated $103,630 in interest revenue and reported a loss of $5.05 million. These losses will continue for as long as AKP produces nothing. What I find strange is how long AKP has been listed.

Share price information for AKP dates back to 2010. And to this day, the company is still gearing up for production. Over that time, shares have spiked 13,105%. So to shareholders, it probably didn’t matter all that much that the company kept losing money.

But why are they still holding the stock, and why did it go up 18% today?

I have no idea. The company has accumulated losses of $17.6 million, and mounting interest payments. If you are about to venture into the small-cap space and bet on future growth, make sure it’s likely to happen.

Jumping into AKP has done extremely well for shareholders in the past, but who’s to say this trend will continue? As long as the company continues to accumulate losses, I’d look elsewhere to invest.


Härje Ronngard,

Junior Analyst, Money Morning

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