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Why Axiom Corp (OTCMKTS:AXMM) Is Surging?

Two weeks ago, Axiom Corp (OTCMKTS:AXMM) issued a press release and confirmed the deal closing of the acquisition of Canadian company, Paper Nuts Corporation. It specializes in the production of unique recyclable packing material. The market didn’t react instantly to the news. However, AXMM share price has witnessed some movement in the last two trading sessions. On Wednesday, investors traded over 758,985 shares and pushed the price by more than 4% to close at $1.4. The 52-week high is $1.15 per share. The gains aren’t explosive, but it is evident that some investors appreciate the new business plan.

The acquisition

Paper Nuts is not a new name in packaging field. Some years ago, when it was private, the executive team featured on CBC’s Dragons’ Den presented its packing solutions. Three members of the “Dragon”, Arlene Dickinson, Bruce Croxon and Jim Treliving, appreciated the idea and proposed a deal to PaperNuts. However, the deal was called off due the due diligence process. Despite the review, many investors believe that if it’s good for Dragons, it will also work for them. Will it really work for Axiom investors?

The details

The three dragons proposed $150,000 for a 30% stake in the company that indicates that they valued PaperNuts at almost $450,000. The latest 10-Q of Axiom is abysmal. However, it covers the performance before the acquisition. Therefore, it will not reflect Axiom’s current situation. The only factor that is evident is two years ago, PaperNuts posted $25,000 in sales

The future ahead

The investors expect management team of Axiom to post strong financials after the acquisition. The former shareholders of the company own almost 79 million restricted AXMM shares. There are currently 1.06 billion shares issued and outstanding which indicates that there are 26 million shares not owned by shareholders of PaperNuts.

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