BBDA, PASO, FOGC – Pump And Dump Alerts – September 9, 2011

| September 9, 2011 | 0 Comments

Pump And Dump AlertsThis week we’re 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 don’t know how these scams work, be sure to check out this free report that exposes the whole thing.

Without further ado, here are this week’s 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 can’t spell aside, and let me ask you a simple question… “What the hell does that mean?”

It’s like a 5th grader broke open the dictionary and tried to use every big word he could find.

Anyway, this pumper – Actual Gains – (Really, that’s their name… I can’t 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 don’t know, but you can decide for yourself.

What’s 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 hasn’t ever filed anything with the SEC (no surprise there)… so I’m 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 she’s hot… but the closer you get and the longer you look, the older and uglier she becomes. Even after a few drinks!

It’s 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 you’re 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.  It’s a simple mistake and one that anyone with a basic accounting background would catch within 12 seconds of looking at the numbers.

But here’s 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 can’t get Accounting 101 right?

This is a “Pump” and I’m not waiting around for the “Dump”!

Patient Access Solutions (PASO)

Now here’s an interesting disclosure…

A “non affiliate third party shareholder” paid $7,000 to a company, who owns our hypester – OTC Reporter –  so they’d 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.  It’s fallen from $0.0031 in late June to an abysmal… $0.0006 today.  That’s 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 doesn’t 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 don’t look any better.  They report just over $6,500 in cash, yet last quarter they lost over $72,000.  How they’re going to survive I have no idea.

Let’s move on…

Fortune Oil and Gas (FOGC)

So, what do you suppose Fortune Oil & Gas does? If you said explore for oil and gas, you’re wrong!  They own a silver mine.  Sure, why not.  Silver is hot right now, so let’s take an oil and gas company and turn it into a mining company.

Really… do people think we’re that dumb?

Let me share one more dumb thing with you… $549,000 cash.

That’s 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.

Let’s think about this… somebody paid HALF A MILLION DOLLARS to a known pump and dumper to promote a company that’s worth only $2.9 million.  He’s not going to make his half million back from company dividends…

Is there value there?  I don’t know, you tell me.  FOGC has $21 in the bank (I spent more on dinner last night) and they have no revenue.  What’s that worth?

$549,000… Sure, there’s honest stuff going on here.

Are you kidding me?

A final word (and warning).

So that takes care of a few of this week’s inglorious “pump and dumps”.

Remember, there’s 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

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Category: Pump & Dump Alerts

About the Author ()

Brian joins the Penny Stock Research team as a seasoned independent trader and financial analyst. Brian graduated with a B.S. from the University of North Florida and now resides in Scottsdale, Arizona. With a background in economics and statistics, he has a keen ability to uncover profitable and growth-focused companies. He has years of real life know-how in analyzing fundamental and technical data that gives him an edge drilling down on companies and financial results. With over 15 years trading experience, Brian has become an expert in the ever-changing equities markets. Today, he scours the markets hunting for penny stocks that offer low risk and high reward.