Taronis Technologies TRNX Stock News

Taronis Technologies Inc (NASDAQ: TRNX) is having a relatively strong day in the market today, gaining more than 3% in the premarket. Nonetheless, the stock tanked more than 20% yesterday, leaving many to wonder just what’s going on. Here’s the scoop:

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Here’s Why TRNX Stock Fell Yesterday

In a press release issued yesterday, Taronis Technologies announced a bit of news that led to concerns among investors. The release was a two-part note to investors.

First and foremost, the company announced that it moved forward with a 1 for 5 reverse stock split. Reverse splits never have a positive reaction int he market. While they are cosmetic moves, they also show signs that the company may be in trouble.

In this particular case, TRNX moved forward with the reverse split to appease the NASDAQ and their $1 per share minimum bid requirement. The company also believes that a higher share price will attract investors that tend to shy away from penny stocks.

The company also said that it received notice from the NASDAQ on August 21 that it needed to revise the record date for the proposed spin off of Taronis Fuels. Essentially, the company could not move forward with a reverse split while a spin-off was pending. As a result, the Taronis Fuels spin off will now take place on November 5, 2019.

This led to some concerns. Investors are looking forward to dividends in Taronis Fuels shares. However, to receive the dividends, they must hold shares until the spin off is complete. TRNX expected for this to take place on September 1, but now there is a delay of more than a month. In fact, the company now expects to distribute shares in mid-November.

In a statement, Scott Mahoney, CEO at TRNX, had the following to offer:

Earlier this week, our shareholders overwhelmingly supported the decision to execute a reverse split in order to comply with Nasdaq listing requirements. As we coordinated this process with Nasdaq yesterday, we were informed that we would be required to extend the record date and ex-dividend dates for the Taronis Fuels spin-off due to Nasdaq listing requirements.

We believe this may provide a significant benefit to our shareholders. We intend to file a Form 10 for Taronis Fuels in shortly. We plan to host a teleconference to help investors see the improved financial performance of this business independent of Taronis Technologies.

Additionally, we believe we can provide material updates on our Turkey, El Salvador and Amsterdam MagneGas projects with significant milestones prior to the new ex-dividend date. This means that there is now an unexpected additional opportunity for current and prospective shareholders to participate in the spin-off process.

In other news issued yesterday, Taronis Technologies announced positive news surrounding its Water Pilot subsidiary. Water Pilot said that it’s newly announced Holiday Inn Franchisee customer had the Water Pilot valve and AI Navigator installed as a paid pilot test at the Holiday Inn franchise in Plantation, Florida. In just a few weeks, the system uncovered a leak that would have cost the franchise owner $13,000 in annual water loss.

In a statement, Scott Mahoney, CEO at TRNX, had the following to offer:

This is an excellent validation point for the benefit of our water conservation technology. The AI Navigator installation process cost less than $2,000 for our client. Very quickly, our technology uncovered a major leak, and paid for itself six-fold. We see this as a clear benefit to our client, and could be a strong selling point for them to consider installations at all of their hotel locations. This relationship could generate upwards of $450,000 in new sales.

Financially, this is a huge win for our client, and equally importantly, avoids the needless waste of precious fresh water resources. Annual global fresh water consumption for industry and residential needs is approximately 1,188 trillion gallons. Our technology has a demonstrated ability to reduce global water consumption by approximately 20%, or 650 billion gallons of water per day.

TRNX Is Still Worth Holding Onto

While there may be some concerns about the reverse stock split, I’m not concerned at all. The truth of the matter is that in order to maintain liquidity and attract interest from larger investors, this was a necessary evil.

Moreover, I understand that some are upset about the month and a half or so delay in dividends, but that’s the nature of the beast. The company had to stay compliant with NASDAQ through the process in order to act in the best interest of its investors. The reverse split was the best way for TRNX to stay compliant, and to do so, the spin off had to be delayed. All of this is understandable.

What I’m getting at here is that while it’s hard to take bad news sometimes, in many cases, it can open the door to opportunity. In my view, yesterday’s declines represented an opportunity to get in on future gains at more than a 20% discount. All in all, TRNX is worth holding onto.

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