After teasing his subscribers (or “boys and girls” as he likes to call them) for a while, Mike Statler, the fictional co-editor of Stock Tips, finally revealed that his newest pick is Ecrypt Technologies Inc (OTCBB:ECRY). This happened after the closing bell on November 20 and it’s fair to say that plenty of people had some high expectations for the (reportedly) $5.1 million pump.
Things weren’t off to the worst of starts when the ticker gained a total of 150% on Friday. The excitement was carried through the weekend and Mr. Statler certainly helped when he said before the start of Monday’s session that ECRY could reach $1 per share. The ticker added another 8% to its value and climbed to $0.36, but suddenly, Mr. Statler went suspiciously quiet.
In the meantime, the British Columbia Securities Commission informed ECRY‘s management team about the pump and the officers decided to act before it’s too late. They issued a press release on Tuesday with which they said that they are aware of the promotion and that they have absolutely nothing to do with it. They advised investors to proceed with caution and to look for reliable information only through the company’s official filings (something we’ve been talking about since the very beginning).
Not surprisingly, the ticker took a beating. In a matter of six and a half hours, ECRY‘s value shrank by a whopping 26% and the stock finished the second session of the week at a little over $0.26 per share.
Imagine at this point that you are in Mr. Statler’s shoes. People haven’t heard from you in two days and some of them have already lost more than a quarter of their investments. What would you do?
Would you apologize to your subscribers about the mess? Or would you simply keep quiet until the whole thing blows over?
Mr. Statler took on a third approach. A couple of hours before yesterday’s opening bell, he informed the “boys and girls” that he has actually been sending emails the whole time. Apparently, all the alerts have ended up in the spam folders. He said that he is still supporting ECRY and that according to him, the 26% drop from Tuesday was caused by an attack from short sellers. No word was mentioned about the press release from the management team.
Did people believe him? Apparently, not in the least.
ECRY took another heavy blow yesterday and incinerated 29% of its market cap. It is currently sitting at just under $0.19 per share which commands a market cap of around $24 million.
Most likely, a few questions have popped up in your mind while reading this: What will happen next? Will Mr. Statler continue with his efforts? Will he help ECRY recover some of the lost ground? Or will more money spent by “boys and girls” go down the drain?
Tomorrow’s session should give us some conclusive answers.
While you’re waiting, you have the time to do a few things. You can open your spam folder, for example, and check if Mr. Statler has indeed been sending alerts on ECRY while it was falling like a rock. If you find his emails, you can decide whether you should whitelist his address, or whether you should leave things as they are.
[[tagnumber 0]][[tagnumber 1]]mCig, Inc. (OTCMKTS:MCIG) has been having a hard time holding its positions in the past several months and is constantly running up and down the charts, depending on the press releases coming from the company.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Considering the fact that [[tagnumber 6]]MCIG[[tagnumber 7]] already has several products and has announced a newer version of their vaporizer, namely the mCig 3.0, as well as a line created in collaboration with rapper [[tagnumber 6]]Rick Ross[[tagnumber 7]], called mCig 3.0 BO$S we reckon that their market cap of $59 million isn’t one of the biggest in the marijuana industry.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Furthermore, although the numbers contained in their financial report for the quarterly period ended July 31 weren’t that big, they were still quite impressive for a company listed in the OTC markets.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 17]] [[tagnumber 18]]cash: $226 thousand[[tagnumber 19]] [[tagnumber 18]]current assets: $2.1 million[[tagnumber 19]] [[tagnumber 18]]total liabilities: $6,943[[tagnumber 19]] [[tagnumber 18]]revenues: $195 thousand[[tagnumber 19]] [[tagnumber 18]]net loss: $1 million[[tagnumber 19]] [[tagnumber 28]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Although the company was still working at a net loss back then and the revenues weren’t that big, we can’t fail to acknowledge the fact that [[tagnumber 6]]MCIG[[tagnumber 7]] had incredibly low liabilities considering it is traded in the over-the-counter market.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Another good thing that has happened to the company more recently is that [[tagnumber 6]]MCIG[[tagnumber 7]] finally managed to spin-off its VitaCig, Inc. division and the awaited payment date for the 1:1 dividend with which each [[tagnumber 6]]MCIG[[tagnumber 7]] shareholder will receive 1 share of VitaCig for each [[tagnumber 6]]MCIG[[tagnumber 7]] share he or she owns is set for November 28.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]This managed to boost the company stock in Wednesday’s trading and the ticker added 16.82% to its value and closed at $0.257, while the 4.1 million shares that changed their owners generated a little over $1 million in daily dollar volume.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Still, as we mentioned in our previous article, [[tagnumber 6]]MCIG’s[[tagnumber 7]] roller coaster run always reaches a moment of correction after the jumps that the ticker makes. This time it came a little too soon, as [[tagnumber 6]]MCIG[[tagnumber 7]] obliterated all the gains from Wednesday in yesterday’s session, dropping 14.40%, to a close at $0.22 at half the previous day’s volumes.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]This just proves how volatile [[tagnumber 6]]MCIG[[tagnumber 7]] really is and highlights the need for doing your due diligence and weighing out the risks before putting any money on the line. [[tagnumber 2]]
A mid-November push sent ImageWare Systems, Inc. (OTCMKTS:IWSY) on what could have been the path to recovery. However, after just two green sessions the stock slingshot around and a streak of red sent it to its six-month low at $1.67 per share on Tuesday. Wednesday brought the bounce, with IWSY putting on 8.9%.
The company climbed in mid-November, likely driven by a couple of press releases concerning IWSY‘s GoVerifyID solution and its presentation within the Fujitsu Retail Solution Marketplace. The company announced an increase of its $3 million line of credit to $5 million in a PR dated Nov 18. On the same day the price sank like a stone. The announcement of the change in the line of credit cannot be blamed for the price drop as the PR came in the afternoon and IWSY opened with a significant gap down right from the bell.
Additionally, the company’s extended credit agreement included provisions for the conversion of an additional $2 mill into IWSY shares at $2.30 – the price the stock closed at on Nov 17 – a generally good deal, considering this was the highest price the company logged over the past three months. IWSY announced the company does not ‘anticipate’ the use of this extended credit.
Here is what the company published in its latest quarterly:
- $488 thousand in cash
- $3.4 million in current liabilities
- $919 thousand in Q3 revenues
- $2.2 million in Q3 net loss
The company burned through a significant portion of its cash during the quarter, with less than half a million remaining against cash of $1.4 million as of June. Revenues for Q3 were comparable to those of the previous quarter, with no dramatic difference.
Everyone has their eyes on the company scoring those big contracts for its products. In response to this general sentiment, CEO Jim Miller stated in a Nov 17 conference call that the company’s partners include huge, multinational corporations and negotiations can be delayed by ‘a quarter or even two’.
October 2014 was a virtual disaster for Cal Dive International, Inc. (OTCMKTS:CDVI). The month saw company stock prices drop from almost one dollar to exactly one dime per share.
The CDVI didn’t really do much better in November – its slide continued with frightening speed right up until last Thursday, when it finally began to turn the tide. How and why did that happen?
At this point, it’s pretty much anyone’s guess what motivated investors to start buying and push the ticker back 34.00% up, then another 28.36% up and finally – 40.12% up yesterday.
Hopeful investors and opportunistic traders may have seen this extreme dip as the perfect opportunity to stock up on “cheapies” – because, even after all that jumping around share prices is currently as low as up to $0.1205.
Additionally, many investors who are used to the OTC Markets being a seedy place, populated mostly by dubious companies, must have also reasoned that – “hey, a dime a pop isn’t too high a price to pay for the stock of an operational company that used to be on the NYSE”. And to some extent that train of thought is correct, but it is also flawed.
CDVI got de-listed from NYSE exactly because it had trouble keeping up with that marnet’s high standards. The company’s latest financial report shows that although it is it is operational, CDVI is far from profitable.
- Cash – $9.6 million
- Total current assets – $237 million
- Total current liabilities – $391 million
- Revenues – $114.5 million
- Quarterly net loss – $42 million
At this point, investors should probably ask themselves – do I really want to own a piece of a company with financials such as these, even if its stock is as cheap as CDVI’s currently is?
As the old saying goes, “even a dead cat will bounce if it falls from a great height”. That may very well be the phenomenon that CDVI is experiencing right now, but if it is – how long can such a bounce last?
ERHC Energy Inc. (OTCMKTS:ERHE) shareholders must be in panic to see their stock reaching further depths towards the rock bottom of the chart. Yesterday ERHE closed in the red at $0.016, a 21.4% fall which is almost a 70% loss in a month. Volumes have been in the millions lately reaching a 52-week high two days ago while the price has hit all-time lows nearing the 1 penny mark. Will ERHE be able to stop the drill to go right through that?
On Nov 5 a press release gave ERHE a short reprieve but it lasted just three sessions. The shareholders are hungry for some bits of news or statements from the management of the company that could quiet down their current fear of a dooming loss of their investments.
This fear is partly real and party generated by posts in forums, communities where they have been talking about a “death spiral” and how the toxic convertible debts of ERHE can cause lower prices at which financiers can dump their converted and well-discounted shares pushing the price even lower, yet making a lot of money out of it. A month ago ERHE was still around the 4 cents mark practically for the whole month but seemingly a press release on Oct 29 pushed the price off the cliff. The strange thing is that the news confirmed the viability of leads in Southern Chad, one of the company’s projects in Africa which sounds like good news and normally would affect a stock more positively.
The other main exploration site for ERHE is in Kenya, Block 11A which is in phase two now and they will either acquire 3D seismic or start drilling an exploration well. The company will may have to raise some money to fund these in the near future as a well drilling has a cost of $10-30 million. But what can we know about the financials of ERHC Energy Inc.? Can they finance such operations at all? Well, their last report was a 10-Q for the quarter ending June 30 which means that the numbers are not really up-to-date. Let’s see some figures that may help us understand if this panic selling is grounded or not:
- $2.7 million in cash and cash equivalents
- $933 thousand total current liabilities
- $1.1 million net loss
The company claimed in their report that this cash “should be sufficient” for more than 12 months but you really have to be a magician to finance with this background all your operational costs and a possible drilling on top of that. But then again you have the option to find some creditors and enter into an agreement for convertible notes where the conditions will not get any better than that of the currently outstanding ones. And that does smell a bit toxic.
We have no current information on the number of convertible notes but they had $611 thousand payable up to June 30 and another $317 thousand worth until Aug 14 which is a good 50% more in one and a half months. And that was 3 months ago. Well, looking at the discounts of these notes there is a potential of around 100 million shares being issued which could definitely push the price even lower. No wonder the shareholders started to panic seeing the price falling. That was simply intensified with a bit of fear mongering in the communities. ERHE’s 10-K is expected to be filed in the coming weeks but the question is how many shareholders will sit around and watch the price reaching ever lower.
Although ERHE does have the potential to bounce back in the future, you had better do you due diligence before rushing to a quick conclusion.
Yesterday the stock of Falconridge Oil Technologies Corp. (OTCMKTS:FROT) lost the ground under its feet and crashed hard. The stock tanked right from the opening bell and registered its lowest point for the day of $0.86. Although it clawed its way to a close above a dollar at $1.03 it was still sitting nearly 20% in the red.
FROT has been the target of a paid pump since early-October and we have been warning our readers that the artificial hype cannot sustain the current valuations of the stock for long. Two weeks ago the company already suffered a severe crash when in just three sessions it dropped from $1.23 to $0.76 per share wiping almost 40% of its value.
Back then thanks to a couple of email alerts the ticker was able to recover but now when it is going down for the second time it may not be that easy. The landing page that signaled the start of the promotion, however, is still online which could mean that the pumpers are not giving up. There hasn’t been a total production budget disclosed for the pump but the disclaimer at the bottom of the Moskowitz Report page reveals a weekly budget of $125 thousand.
Even after the massive loss from yesterday the company is still commanding a market cap of $50 million, a number that is grossly over-inflated. In order to realize how ridiculous that valuation truly is just take a short look at the latest quarterly report filed by FROT. It covers the period ending August 31 and contains the following financial results:
• $979 cash!!!
• $11 580 total current assets
• $1.8 million total current liabilities
• $1497 revenues
• $57 thousand net loss
But being a pumped stock usually means that the red flags run far deeper than the lackluster financials. Back in 2008 FROT sold 3.5 million shares to a group of investors for just $65 thousand in proceeds, or in other words each share was priced at approximately $0.02. Although already extremely cheap they became even more so thanks to the 6-for-1 forward stock split performed in 2010. It turned those 3.5 million shares into more than 19 million representing a significant portion of the 49 million outstanding shares reported as of October 22, this year.
Taking into account the fact that FROT has been trading extremely thinly it is more than likely that the people who bought those shares still own the majority of them and could reap massive profits at the moment.
We will see if the stock will manage to slow down its fall when the market reopens on Friday. Even if it does the red flags around the company should not be underestimated. Use caution and weigh all the risks before committing to any trades.
For a while the share price of Terra Tech Corp. (OTCMKTS:TRTC) wobbled along on low daily volumes. On Wednesday TRTC took a more dramatic plunge as volume came back up. The stock dropped 7% to a close of $0.32 per share, and share volume went back over 1 million.
It’s difficult to believe that TRTC lost 35% of its market cap in less than a month, especially considering the positive announcements that have been made in the meantime. TRTC chimed in with Nevada news concerning its operations in the state and the push to get dispensary, cultivation and growing ops up and running. Even though the current state of affairs was described as a ‘success’ in the PR, the market’s reaction suggests traders might think otherwise.
The dates provided by the company for the completion of all licensing procedures and the start of construction of its Las Vegas dispensary are almost all in 2015. With this wait in mind, it’s not unlikely that the price fumbles further.
The last quarterly report was not much different from what was expected:
- $3.4 million in cash
- $10.2 million in current liabilities
- $1.3 million in Q3 revenues
- $9.2 million in Q3 net loss
Revenues shrunk dramatically quarter over quarter but TRTC looks like it will be able to meet its $7 million 2014 guidance. However, the gross margin is still thin, even if it did see some improvement QoQ. Net loss has also grown drastically compared to the previous quarter.
There is likely a lot going on with TRTC at the moment, considering the busy licensing schedule for the multiple marijuana-related locations the company is striving for. However, investors will probably not get many new meaningful updates on the subject before the announced dates come. It remains to be seen how well TRTC fares in this time.
On October 6 the stock of NuState Energy Holdings, Inc. (OTCMKTS:NSEH) reached a high of $0.0029. Unfortunately that day also marked the beginning of a steep downwards trend that brought the ticker back to the very bottom of the chart. Investors confidence in the stock has been shaky at best but yesterday’s events weakened it even more.
A couple of hours after the start of the session a PR was published announcing the closing of a $50 million revolving line of credit with TCA Global Credit Master Fund, LP. The initial draw down was reported to be $5 million. Shortly after that another press release hit the web. This time it revealed that NuState have entered into primary talks with SAIC-GM-Wuling Automobile for a license agreement for NSEH’s IP software GPSTrax. SAIG-GM-Wuling is a joint venture between SAIC Motor, General Motors, and Liuzhou Wuling Motors Co Ltd.
Such news couldn’t remain unnoticed and indeed investors rushed towards the company’s stock. The buying pressure pushed NSEH to a daily high of $0.0014 but imagine the surprise of all those who bought in when it turned out that both PRs were not authorized by NuState and were in fact entirely fake. The situation is quite serious – many of those who were lured by the PRs suffered massive losses as NSEH crashed hard and closed 20% in the red at $0.0004. With a record for the company amount of 813 million traded shares and dollar value that surpassed half a million and reached $631 thousand an investigation by the SEC is highly likely.
What is certain though is that NuState is headed for a rather volatile session when the market reopens tomorrow. The conference call scheduled for December 9 should also be quite interesting.
Even before yesterday’s debacle NSEH was still an extremely risky choice. The company hasn’t filed a single financial report for the past year and half with the latest one being a quarterly report for the period ending March 31, 2013. And back then things were looking rather grim:
• $2513 cash and total assets !!!
• $4.5 million total current liabilities
• ZERO revenues
• $227 thousand net loss
In a press release issued on November 6 NSEH stated that the audit of their financials is going according to plan and the first 10-K report should be filed by the end of the month with the company becoming current by the end of January. Well, there are four more days for them to submit this first report.
Recently the number of authorized shares was increased by 3 billion and at the moment it stands at 3.75 billion. With millions in outstanding notes and convertible notes the dilution might be devastating.
It should be obvious that NSEH is one of the riskiest stocks at the moment. If you are determined to trade the stock be sure to do extensive due diligence before putting any money on the line.
Advanced Battery Technologies, Inc. (OTCMKTS:ABAT) added 10% to its market value yesterday, for no apparent reason.
Looking at the company’s history, one can’t help but feel perplexed. ABAT seemed to have been doing great, and showed care for investors, straight up until the point when it got de-listed from the NASDAQ. Then it sort of lost interest in the market, and simply gave up. As it’s OTC Markets profile indicates, not a single financial report has been filed in over 3 years.
One could argue that it still kept investors informed, through statements posted on its own site, but the numbers that it gave were unverifiable. With no due diligence possible, most of its supporters have been buying blindly ever since. That is most probably why ABAT enthusiasts were so happy to learn that the company is finally planning on resuming its reports.
As can be seen on the charts, this news, as well as the announcement that it is planning to make a share buyback pushed the ticker to quite the high in the last couple of sessions.
Both news are excellent, of course, and one could understand why they drove stock prices up. Still, investors probably shouldn’t fall head over heels for ABAT, just because the company made a few promises. Why?
Every investor should be fully aware that knowledge is power, especially when it comes to the stock market. When the official filings are made, investors could research ABAT and commit to its stock knowing all the details, and thus have a measure of control over the fate of their investment. However, presently, they simply have no knowledge and no power over the situation.
And by the end of the day, what do investors know?
They know that ABAT is a Chinese company that used to be great, but has not reported in years. They know that its behavior is erratic, and until recently it showed almost no concern for investors. They know that it has promised to mend its ways, and could probably do so, but hasn’t shown anything for that promise to date.
All in all – investors currently have nothing solid to convince them to commit. Nothing but hype and hope. And we all know what happens to stocks that rise on hype alone.