BBDA, PASO, FOGC – Pump And Dump Alerts September 9, 2011
This week were exposing these three popular Pump & Dumps: Bebida Beverage Company (BBDA), Patient Access Solutions (PASO), and Fortune Oil and Gas (FOGC).
Welcome to Pump and Dump Friday, where every week we highlight a few of the bogus promotions that are going on in penny stocks.
If you dont know how these scams work, be sure to check out this free report that exposes the whole thing.
Without further ado, here are this weeks disasters waiting to happen:
Bebida Beverage Company (BBDA)
There was one thing in the email that caught my eye
Massively Potentious Forward-Looking Events
It was one of the reasons we were told to buy this stock. Now, put the fact that this guy cant spell aside, and let me ask you a simple question What the hell does that mean?
Its like a 5th grader broke open the dictionary and tried to use every big word he could find.
Anyway, this pumper – Actual Gains (Really, thats their name I cant make this stuff up.) is pushing BBDA hard.
And I can see why they tell everyone in their disclaimer they just bought the stock and they might sell it at any time. So they hope you and I buy and drive the stock higher then they can sell. Are they really going to do that? I dont know, but you can decide for yourself.
Whats amazing is the pumper is willing to put real cash behind this company so there must be something good. RIGHT!?!
Not so fast
I did a little digging. The company hasnt ever filed anything with the SEC (no surprise there) so Im relegated to using the little information I can find on the internet.
And what I found looked great. I actually found a set of interim financial statements and it looks like they have real numbers.
Unfortunately, these financials are like the cute girl you first see at the bar. A quick glance says shes hot but the closer you get and the longer you look, the older and uglier she becomes. Even after a few drinks!
Its the same thing with these financials.
What tipped me off?
They look like they were put together by a first year accounting student. For example, there are some glaring basic mistakes like calling the revenue line Gross Income. If youre going to prepare financials, remember Revenue is at the top of the Profit & Loss statement . Income is at the bottom.
What else was wrong?
Well, they list their Revenue (mislabeled) at the top then they list Cost of Sales. So far so good. But the next line item throws me for a loop. They list Gross Margin, which is right, but they do the basic math wrong.
Gross Margin is Revenue LESS Cost of Sales.
Whoever prepared these financial statements added them together. Its a simple mistake and one that anyone with a basic accounting background would catch within 12 seconds of looking at the numbers.
But heres where it gets really bad
Because of this simple mistake, every following number on the Profit & Loss statement, the Cash Flow statement, and the Balance Sheet is WRONG!
How can you buy the stock of a company when management cant get Accounting 101 right?
This is a Pump and Im not waiting around for the Dump!
Patient Access Solutions (PASO)
Now heres an interesting disclosure
A non affiliate third party shareholder paid $7,000 to a company, who owns our hypester – OTC Reporter – so theyd send out an email to you and me on PASO.
Are there enough people involved in this one?
Anyway, I can see why some shareholders are paying to hype this stock. Its fallen from $0.0031 in late June to an abysmal $0.0006 today. Thats a staggering 80% loss in value!
Just to put that in perspective, A PENNY will buy you 16 shares of the stock today.
If that doesnt make you want to run screaming for the exits, then consider their capital structure. The company reports a shocking 1,559,188,926 shares issued are outstanding. Maybe that explains why the stock is plummeting.
Just as a point of reference, Apple (AAPL) you know the company that makes the iPod, iPhone, and Mac only has 927 million shares outstanding.
So it makes perfect sense that this tiny company would have almost twice as many shares!
What is management thinking?
Their financials dont look any better. They report just over $6,500 in cash, yet last quarter they lost over $72,000. How theyre going to survive I have no idea.
Lets move on
Fortune Oil and Gas (FOGC)
So, what do you suppose Fortune Oil & Gas does? If you said explore for oil and gas, youre wrong! They own a silver mine. Sure, why not. Silver is hot right now, so lets take an oil and gas company and turn it into a mining company.
Really do people think were that dumb?
Let me share one more dumb thing with you $549,000 cash.
Thats how much OTC Reporter was paid to hype this stock this week. Seriously. Half a million dollars.
Now let me tell you why you should stay far, far away, from this stock The entire company is worth a whopping $2.9 million.
Lets think about this somebody paid HALF A MILLION DOLLARS to a known pump and dumper to promote a company thats worth only $2.9 million. Hes not going to make his half million back from company dividends
Is there value there? I dont know, you tell me. FOGC has $21 in the bank (I spent more on dinner last night) and they have no revenue. Whats that worth?
$549,000 Sure, theres honest stuff going on here.
Are you kidding me?
A final word (and warning).
So that takes care of a few of this weeks inglorious pump and dumps.
Remember, theres a lot more of this going on each week than we highlight here.
As you know, penny stocks are a great place to invest your money. You just have to do your due diligence to stay away from all the scams out there these days!
Until next time,
Brian Walker
Category: Pump & Dump Alerts
