US Energy Initiatives Corporation, Inc. (OTCMKTS:USEI) Breaks Through 1 Cent
For the past three sessions the stock of US Energy Initiatives Corporation, Inc. (OTCMKTS:USEI) has been experiencing another major surge up the stock charts. Yesterday it added exactly 60% to its price and closed the day at $0.012. During the trading hours USEI reached even higher and posted an intraday high of $0.015.
Enthusiasm towards the stock was so strong that investors managed to exchange the near record number of 360 million shares. Even though they couldn’t break the 416 million shares from February 3 the resulting dollar value from yesterday’s trading of $4.29 million was never before seen by USEI.
The buying frenzy was caused by yet another cannabis-related PR released by the company early in the morning. It proclaimed that USEI has finalized a deal with “a Washington product producer” which is a welcomed break from the multitude of fluff PRs we have witnessed in the past month.
Ever since USEI decided to focus on the marijuana industry with the announcement from February 3 there have been 13 different PRs offering little useful information. Not to mention that despite USEI‘s claims that they won’t be abandoning their previous bio-diesel operations neither of the PRs has even mentioned anything about it.
And although yesterday’s press release received such an extremely positive reaction from the market if you read the entire article you will see that despite the rather bold title the deal has not actually been completed with the final terms and details to be settled at some point next week.
The massive hype around the marijuana industry might be able to sustain the current over-inflated share prices of the company but their fundamentals certainly won’t be. The bio-diesel operations left USEI with the following financial results at the end of 2013:
- cash: $64 thousand
- current assets: $639 thousand
- current liabilities: $1 million
- yearly revenues: $100 thousand
- yearly net loss: $261 thousand
Investors should also keep in mind that currently USEI has 1.2 billion outstanding shares out of the 1.44 billion authorized. If the company wants to improve its financial state it may be forced to approve an increase of the authorized shares and put its shareholders through even more dilution. The 210 million shares issued as dividend back in November will also become free trading in just a few weeks which could influence the performance of the ticker.
USEI demands the use of caution prior to any trading with their stock especially when you take into consideration its past history of multiple paid pumps. Do your own due diligence and plan your investments accordingly. 