Inside Bulls with an Attempt to Tout U.S. MINE MAKERS INC (PINK:UMKR)
Just like any other business sector, the stock promotional industry has its big and small players. The lager ones usually receive more money for their pumps and the fact that they have more subscribers means that their influence on the featured stock is bigger. The smaller ones like Inside Bulls, one the other hand, are not too greedy and they are happy to receive “only” $3,000 for a couple of emails full of bright promises.
That doesn’t concern us that much and if we’re honest, we’re not all that bothered about how much money the promoters make out of their somewhat dubious business. They do get a bit silly every now and then, though, and sometimes we find ourselves wondering why would they even bother featuring companies like U.S. MINE MAKERS INC (PINK:UMKR) in their emails.
UMKR is a company with a diverse portfolio of… hopes and dreams. Until 2008, they were called Uranium City Mining Corp. and, although it’s not specified anywhere, we’re ready to bet that they were in the uranium mining business. Apparently, they were not that successful which is why they changed their name and decided that they were going to be exploring gold mines… until January this year when they announced that they will not spend any more money on the gold properties and that they will start looking for rare earth minerals. Now, a month and a half later, they are saying that they will also enter the oil and natural gas business.
The only problem is, we can’t see that happening any time soon. UMKR‘s profile on the OTC Markets website clearly states that they are a development stage company and with that in mind, we weren’t expecting all that much from their financial statement. Even so, we were still surprised at how bad it is. Here are the most important financials as of September 30, 2012:
- total assets: $29 in cash
- total liabilities: $50 thousand
- no revenue since inception
- quarterly net loss: $7 thousand
It’s fair to say that with only $29 in the bank they won’t be competing with Exxon or Chesapeake any time soon although, if the announcements are to be believed, the properties which UMKR will supposedly explore are adjacent to wells drilled by these two companies.
Apart from the fact that they are in a horrific financial mess, we somehow find it difficult to believe that after so many years of doing nothing, they will finally get the revenues and the positive cash flow going.
UMKR recently announced that they have appointed some new directors as well. We hope that the people who will run the company from now on will finally start thinking about the shareholders. It is clear from the filings that their predecessors have been reluctant to do that. So far UMKR have raised funding solely through borrowing money from a variety of people and companies. They have issued a number of notes and the biggest problem with that is the terms under which these notes are convertible. Nearly all of them can be turned into common shares and the conversion price is the par value of the stock – $0.0001. This means that the potential dilution is extreme, but it also means that the note holders could be in for a massive profit.
Which could be the reason for the current promotion, by the way. If the note holders want to make some quick money and they decide to sell their shares, UMKR‘s price will drop significantly – a phenomenon that we have seen far too often with promoted penny stock companies. A classic case in point is WORLD ASSURANCE GROU (PINK:WDAS). They got pumped by Inside Bulls among other newsletters a couple of weeks ago and the chart on the right shows what happened once the emails stopped.
