Alternative Energy Partners Inc (OTCBB:AEGY) Bounces on Speculation

Though the name wouldn’t suggest it, Alternative Energy Partners Inc (OTCBB:AEGY) is a pot stock and as such, it’s been on an insane ride over the last few months. The so-called green rush dug the ticker out of the triple zero levels back in January and sent it on an exciting ride which culminated at the beginning of February when it stood at over $0.01 per share.

At this point, the people who were well aware of the company’s position knew that it doesn’t really have what it takes to stay calm at these levels and, somewhat predictably, AEGY dropped back down to sub-penny land. Less than four months after peaking at $0.01, the stock plummeted to $0.0012 and it looked like going back to the triple zero levels was inevitable.

Something happened a couple of days ago and it triggered an impressive bounce. AEGY hasn’t registered a red sessions since last week and the cumulative gains from the run so far amount to 183%. Currently, the stock stands at $0.0034 which results in a market cap of just over $12 million. Many people around the discussion boards reckon that this is just the beginning and predict multiple pennies in AEGY‘s not so distant future. What are the odds of this happening?

It’s really hard to tell because there doesn’t seem to be an immediately obvious reason for the sudden revival of the ticker. There are no paid promotions and the latest press release (which urges us to watch a forty-five minute long show in which some celebrities smoke weed) is dated April 16.

In fact, the only thing that could be pushing the stock up the charts at the moment is a rumor that the merger of AEGY and SK3 Group Inc (OTCMKTS:SKTO) is about to be completed. As you probably know, a couple of months ago, the two companies announced their plans to combine their efforts and create a solid enterprise which could one day be listed on one of the major exchanges.

We’ve written a fair few articles on SKTO and we’ve mentioned numerous times that there are quite a lot of things you need to consider carefully before investing in this particular ticker. At the same time, we can see why AEGY‘s shareholders are looking forward to the completion of the deal.

As far as the latest 10-Q is concerned, Alternative Energy Partners are simply unable to do anything significant on their own. Here’s a summary of the most important figures recorded at the end of January:

• cash: $89
• total assets: $6,089
• current liabilities: $1.7 million
• no revenue
• accumulated deficit: $10.2 million

Of course, when they include the operations of the PharmaJanes website and when (and if) SKTO come on board, the statements should look quite a bit different, but until that happens, you should be aware of the fact that between August 2013 and March 2014 AEGY converted a total of $635,972 worth of notes into a whopping 2,754,886,225 shares of common stock.

This brings the conversion rate to around $0.0002 per share which, at the moment, presents a 94% discount from the current market price. Will the people who got the cheap shares keep them? Or will they decide to part with them and make a quick profit?

We’ll leave it up to you to weigh the odds.