Warning Dont Invest In These Chinese Stocks!
The global markets can provide incredible profit opportunities for investors. Whether its buying shares in high growth penny stocks or adding ETFs to your portfolio, the market is teeming with potential.
But just because you see a stock or fund that looks like a winner, doesnt mean it really is. Im talking about great stories, not great companies theres a big difference!
Youve seen them before companies touting unbelievable profits – selling ground breaking products that no one can live without.
Wow, that sounds good Where do I sign up?
Stop right there!
You see, there are some real shysters out there just waiting to con you out of your money. These scams are regularly being hatched all over the world. And some of the biggest offenders are in China.
In this case, its an OTC (Chinese) Reverse Merger.
Now there are a lot these Chinese reverse mergers out there. But, Im going to expose a company you should avoid like the plague – fleecing unsuspecting investors as we speak.
First, let me explain how it works
To start with, not all stock markets are created equal take the Shanghai Stock Exchange for example.
The Shanghai Exchange has many restrictions including strict trading rules for foreign investors and challenging cash controls. Add to that a long list of requirements to bring a company public and youve got a very difficult market to enter.
How hard could it be?
Well, a company needs to have been in business and show profits for three consecutive years. And heres the big deal killer the company must not have committed any major illegal activities or been caught with false accounting records in the last three years.
Now, the Chinese authorities do afford most companies fairly lenient accounting and reporting guidelines after they go public. But fabricating a companys true financial condition is a line in the sand most CEOs wont cross.
Heres the thing
If a Chinese company lies or stretches the truth about their company and the authorities get wind of it, watch out! Punitive action is swift and final like being shot in public for example. Not an option anyone would choose.
This limits many small Chinese companies ability to finance their company by selling stock.
So, some choose to come to America instead.
And with a recipe of lies, fake financials, and expensive hype, they embark on a scheme to make themselves appear like the next Apple (AAPL).
OK, now its time to reveal a company playing this preposterous game
And the stickup artist is Xinde Technology Company (OTCQB: WTFS).
Today, XINDE is being touted as a Chinese diesel powerhouse. They allegedly make fuel injection systems that are revolutionary and will change the world. Yeah, this should be a real game changer for the planet!
So to get things started, they bought a US company once traded on the OTC Market, Wasatch Foods. The transaction gave Xinde instant access to the market, while providing only limited financial information.
Heres the problem
The financials and company details theyre presenting contain mostly unverifiable information. Do you trust a company that doesnt report to the SEC?
And thats not all
You might already be familiar with this company. A big reason may be all the money thats been spent marketing this gem.
It may shock you to learn, public relations firm Gladiator Stocks was paid $800,000 to push the B.S. company. Hundreds of thousands of e-mails shot out attempting to lure investors into buying Xindes irresistible shares.
But heres the thing
Gladiator is a known pump and dump firm pushing garbage all over the net. Would a legitimate company pay $800,000 to crackpots to advertise in such a suspicious way?
So far its working. In the last few days, the companys trading volume has exploded. It recently went from zero to over eight million shares traded in a single day, generating more than $6,000,000 in cash! Mission accomplished!
And this story really isnt that unique. Hundreds of bogus companies are plopped onto the market everyday.
But investing in legitimate small cap companies can afford great opportunities. The potential for profits can be sizeable and REAL. These are investments that will allow you to sleep at night.
You see, we all need to have confidence in the companies we invest in. And the great news is we can find solid companies with financials that are reported to the SEC. Firms using pump and dump companies to get the word out just cant be trusted.
They say theres nothing like the real thing I couldnt agree more!
Until next time,
Brian Walker
Category: Penny Stock Tips, Technology Stocks
