Aftermath of the Pump Campaign for American Graphite Technologies Inc (OTCBB:AGIN)
The second pump campaign for American Graphite Technologies Inc (OTCBB:AGIN) is going as predicted. The case is classic and the price of the stock went down in the last trade session as the pump emails ceased.
AGIN‘s stock traded in high volume on April 25 at the peak of the pump campaign. The price of their stock reached $0.82 on that day with a volume of around 1.7 million stock traded. At that price and volume the trade value almost reached the $1.5 million mark. We wonder what piece of that $1.5 million went to insiders, but we reckon it was considerable.
The fact is that AGIN can’t support itself in any other way except for selling stock. The company’s financial state is not very bad but AGIN is yet to prove itself as being a profitable business. In this run of thoughts let’s take a quick look at the numbers of prime interest from their last quarterly report covering the period ended December 31, 2012.
cash: $315 thousand
current liabilities: $17 thousand
revenue since inception: $0
net loss: $115 thousand
Their numbers aren’t as bad as those of other penny stock companies and they dont have millions in liabilities. The concern comes from the fact that they have had zero revenues for nearly 3 years of operation since inception on June 1, 2010.
The company also seems to put out press releases only during the pump campaigns in order to aid them. The latest is from April 24 and it announces a letter of intent with the the Kharkiv Institute of Physics and Technology (KIPT) for collaboration in the research the properties of graphene as a working material for 3D printing.
Around last month’s pump campaign they had a press release which contained KIPT’s initials, however, it was about the appointment of Dmytri Vynogradov who is a researcher there. It seems that the PR team of the company is especially active in aiding the pumps. Well, this is not something shocking as selling stock is the only way the company is able to finance itself.
The question about how long this will last remains. If they don’t start making real progress investors will be left with stock that’s worthless and will experience what one may call a shell company aftermath.
The fact is that each of the company’s pump campaigns is accompanied by high volume of shares traded which leads one to think that insider dumping of stock may be involved. For now at least there isn’t that much stock issued, so dilution is not a threat. No actual profitable operations have been going on in the past 3 years, which is a lot of time for this type of business.
With all that in mind be sure to do your due diligence and proceed with caution when you are thinking about investing in AGIN.
