EFIR, EMPM, POTG – Pump And Dump Alerts September 23, 2011
This week were exposing these three popular Pump & Dumps: EGPI Firecreek (EFIR), Empire Post Media (EMPM), and Portage Resources (POTG).
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:
EGPI Firecreek (EFIR)
Researching small pump & dump companies can be boring but every once in a while you find one so interesting it just grabs your attention!
Todays pump and dump was one of those companies. Their history reads like a soap opera. But more on that in a moment.
The pumper is none other than Penny Stock Spy, and the stock theyre pumping is EGPI Firecreek (EFIR). The terms of the deal were simple. For one days work and a profile of the company, the pumper received $10,000!
Of course, the person paying them was a third party. So you dont quite know who is behind the deal but that doesnt really matter.
What I found in the companys filings was quite entertaining.
The history of the company starts with the major creditor foreclosing on the company and taking all the assets then it goes downhill from there!
There was a stock split, an acquisition, a second acquisition, the acquisition of a working interest, a takeover of a foreign business and the assumption of debt, another acquisition, yet another acquisition, a change in share structure, another stock split, an acquisition of yet another business, the issuance of a new class of securities, the sale of a business, YET ANOTHER acquisition, the sale of a business, and a massive 1 for 500 reverse split.
For those of you counting, thats
One change in share structure, Two business sales, Three stock splits, and Seven acquisitions and a partridge in a pear tree!
So with all that activity youd expect this to be a huge company right?
Not so fast.
In the last six months, they generated just over $154,900 in revenue. The problem is the cost of goods sold is over $167,800 so the company lost money on every sale they made.
But wait, it gets better.
The company is deep in the hole, and we havent even looked at their expenses. Their total general and administrative expense was over $782,700. Their employees are either overpaid or they spend a lot of money on paperclips!
When its all said and done, for the first six months of the year, the company lost $2.3 million.
That explains why the stock is trading for a whopping $0.014. So a penny and a half buys you a share and if you ask me, thats a penny and a half too much!
If you like soap operas, take a look at this one, otherwise stay far away.
Empire Post Media (EMPM)
The last time I walked onto a used car lot I had the slimy feeling not everything was on the up and up. I got the same feeling reading the latest pick from the big-time pumper Pick Alerts.
Today they highlighted Empire Post Media (EMPM).
Keep in mind they received a mere $20,000 cash from a third party to put out the email alert. In it, they claimed you could see gains of 500% or more!
So of course I had to dig deeper.
Whats so hot about Empire Post? They provide post production services to the TV and movie industry. They can turn regular TV shows into 3-D TV shows. Pretty cool
Heres the problem.
Our pumper highlights just how exciting the 3-D experience is becoming. He throws out huge numbers about the sale of 3-D television sets. He even talks about how 3-D programming will overtake regular programming.
What he doesnt mention is the practical side of the business.
Like the fact the company has a Going Concern from their auditors. That means their own accountants dont think they have enough capital to survive the year. The company even says right in their SEC filing we may not generate revenue that is sufficient to cover our expenses for the next six months.
Um, that doesnt sound good.
The pumper also overlooks one small fact – last quarter the companys cost of revenue was higher than their actual revenue. That means it costs them more to provide their service than they were able to charge for it. In essence, every new sale COSTS THEM MONEY.
Thats not how you run a business.
Finally, we reach the companys valuation and this is where it gets scary. Right now EMPM, with less than $20,000 in assets and $71,000 in revenue, is valued at a staggering $57 million!
Their price to sales (P/S) ratio is a stunning 811x.
For you to get a 500% return on this investment like our pumper claims is possible EMPMs P/S ratio would have to be a mind boggling 4,055x.
As a point of reference, Apple (AAPL) has a P/S ratio of 3.7x and thats considered by many as being high!
If EMPMs P/S ratio was the same as Apple, EMPMs stock would be worth $0.0027. (Its trading at $0.30 today.)
Thats a clear sign of just how overhyped this story is.
Portage Resources (POTG)
You know some things never go out of style. And in a pump & dumpers world, some companies just cant be left alone.
Take for example Penny Stock Advice and their second go round with a company called Portage Resources (POTG).
The pumper likes to highlight the last time they worked their magic, the stock jumped 1,200%. What they fail to mention is the epic collapse of the stock price. Over a two day period, the stock dropped by 50%… then after a short rally plummeted to under 10 cents a share.
Now theyre at it again.
This time theyre getting paid $20,000 to hype this shell company.
Why do I call it a shell?
Because according to the most recent filings, theres nothing there! The Pumper lists an impressive group of eight properties the company is involved with. But when you pull their financials, you find something really interesting
NOTHING.
Thats right, they own nothing. It says right in their filings. No revenue and better yet, as of March 31, 2011, no assets. No cash, no land, no trucks, no equipment.
Wouldnt a mining company at least own a mine?
This is a Pump & Dump at its worst.
Stay far, far away!
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
