Troika Media (NASDAQ: TRKA) stock is up 49% on no real news flow. The only thing there is is an announcement about the annual general meeting. This does not, to our mind either cause or justify a near 50% rise in the TRKA stock price. It’s possible that we’re wrong on this, of course it is, but that’s the way we’d run with this idea. A flurry of speculation that doesn’t, not really, amount to very much.
We’ve talked before of Troika Media: “Troika Media (NASDAQ: TRKA) hasn't exactly pleased stockholders this past 12 months as they've lost 88% of their money on the plummeting price. On the other hand it'll rise 2,500 %, or 25x, at open today - which might please some but we should note that it's a purely nominal price rise. There's a slight amusement in that Troika actually announced that it was solving, in the best way possible, a looming problem and yet still the stock price - the real price - dropped 17% as a result. Maybe the assumption is that while one problem has been solved others still exist? “
That 2,500% price rise (from a starting point of some 12 cents) was of course a one for 25 reverse stock split. This was to make sure that the Nasdaq quotation was maintained by getting that nominal stock price up above the $1 minimum bid price. That was a whole 5 months back. It didn’t really work long term:
Troika Media stock price from Google Finance
Actually, it didn’t even work medium term and we might even think that 5 months is short term if we were being harsh.
The problem Troika Media has is with the basic business itself. “Revenues for the three months ended June 30, 2023, were approximately $58.7 million, a decrease of approximately $26.7 million from the comparable prior year period. The decreases in revenue were primarily the result of decreased spending by the Company's insurance clients within the managed services revenue stream. The decrease in performance solutions revenue was largely driven by decreased media spend and declines in response rates to media campaigns related to legal services and home services clients, compared to the prior year period.”
The business is shrinking and as far as we can see faster than the overheads are. Now, it is possible that they’ll be able to turn this around. We’re unsure of that and don’t think they’ve much runaway either. But there’s nothing we can see in the newsflow to suggest they’re worth 50% more today than they were yesterday morning. We thus assume that this is just one of those speculative flurries that afflicts microcaps. But note that’s an assumption.