Watch Out For These Pump and Dump Penny Stocks
Pump & Dump Penny Stocks Right Now
Here we are at it again. Another scammer is starting to pump and dump penny stocks as we speak.
I got the email this morning
The scammer claims, We see a lot of potential for massive upside right now!
They call it a Ground Floor Opportunity.
And tell everyone, so hurry and start your own research.
What have I said time and time again about scam artists and their desire to get the suckers to act fast?
Just review my article about Penny Stock Scams
Despite my constant warning, they keep happening and todays scam is no less threatening to your health and well being as a matter of fact any time you see a pump and dump with penny stocks, its a potential trap.
Todays Penny Stock Pump & Dump
Lets take a look at todays scam.
Emails I received talked about how the stock was ready for a monster move
The company: Definitive Rest Mattress (DRMC).
So, my first stop is Yahoo Finance I just want to get a quick look at the numbers.
What we have is a penny stock trading at 1 and a fraction of a cent with 6 million shares trading.
Wow thats a lot of action or is it?
Well, 6 million shares at a penny a share is only $60,000 worth of trading volume not exactly a liquid market.
Heres the chart
Notice how the volume is tiny for months on end then all of the sudden starts to get crazy? And the stock price jumps.
So must be some great news about our bedding and mattress manufacturer right?
Well, the news is
The companys going to now make Machine Tools and Metals for the Aerospace and Industrial manufacturing sectors!
Sure, that makes sense a lot of intellectual knowledge between mattress manufacturing and machine tools for aerospace Reminds me of an old pump and dump where a car wash was going to become an internet technology company! HA!
Well a few days ago they acquired a company called NU Metals
Maybe they can make it work lets dig into the details what did they pay whats the capital structure look like how profitable is NU Metals?
My Next Stop SEC.gov.
Since the website was thin on information about the acquisition, I figured Id go over to the SEC.gov and read their filings and merger documents
After all, thats where real companies file their legal documents.
Thats when I uncovered another warning sign nothing is listed in the EDGAR system. How can you research a penny stock, like this promoter wants, if you cant find any information.
How can you study an acquisition if the merger documents arent available?
OK one more chance at redemption
Lets swing by otcmarkets.com.
At least they have some info here but its old. The most recent filings are from November 2014. Nothing on the new acquisition, the merger or the new direction the company is taking.
What I did find was interesting
The Numbers On A Pump & Dump Penny Stock
I did find some numbers
The September 2014 financials showed Revenue falling from just over $800,000 in 2013 to just under $200,000 in 2014. That means business dropped off by more than 75%.
And they went from making money to losing money.
Its probably why they have a going concern statement in their information.
The officers are Juan Murga and Claudia Lima and between them they own 78% of the stock outstanding.
Look, I dont know what their plans are but this deal sounds fishy.
The company might be changing direction their acquisition might be decent but you have no way to know because theres no information available and no filings were made with the SEC.
To top it off, someone someone paid the promoter $25,000 to promote the stock for one day. Thats right $25 grand for one day of promotions.
And if you need one more reason to stay away
Look at the same stock chart but back in 2014.
Its like Groundhog Day all over again!
As you can see, the company showed another pump and dump classic chart pattern.
Like I said, this just smells fishy to me
You can learn more about exposing pump and dump penny stocks scams here!
Good trading
Brian Kent
Penny Stock Research
Note: Brian Kent has been trading the markets for more than two decades and now writes and edits for PennyStockResearch.com. You can sign up for the penny stock research newsletter a trusted source for the truth about penny stocks! Sign up today and get a free research report – http://pennystockresearch.com/free-reports/.
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Category: Pump & Dump Alerts
