America Resources Exploration Inc (OTCBB:AREN) Slows Down
America Resources Exploration Inc (OTCBB:AREN) has both the look and the feel of a typical promoted penny stock. Take the performance, for example.
After sitting idle for a while, AREN was suddenly brought to life last week when it managed to more than double its value in a matter of just two sessions, all the while, logging some impressive volumes. Yesterday’s trading wasn’t quite as exciting, but the ticker still manage to close at just under $0.34 which is about 0.6% in the green.
In typical promoted penny stock fashion, there’s some good news as well. A few minutes before the end of Friday’s session, AREN announced that some “carefully selected” investors have agreed to pour $500,000 into the company. In exchange, the “carefully selected” investors will receive a grand total of 2.55 million AREN shares at an average price of just under $0.20 per share.
This is about 40% below the current market price, but it must be said that AREN needs the money. And it needs it urgently. The 10-K for the twelve months ended March 31 looks like this:
- total assets: $5,971 in cash
- total liabilities: $6,000
- NO revenue since inception
- quarterly net loss: $29,491
The horrifying financial statement isn’t the only red flag. The company just emerged from a reverse merger which was accompanied by a 1 for 15 forward split and it appears to be using a virtual office which was once utilized by Chimera Energy Corp (OTCMKTS:CHMR) whose officers were later charged with orchestrating a pump-and-dump scheme.
To summarize our findings so far: the stock is moving up, but although there is some good news, there’s nothing substantial enough to suggest that it can withstand the pressure at the current levels. In other words, we have a by-the-book promoted penny stock situation.
And, as is often the case, there are people who can profit from it. As we mentioned in our previous articles, in September 2014, some lucky investors bought 2,360,000 shares for just over $20 thousand. Thanks to the aforementioned forward split, they could now be holding on to more than 35 million shares which, at yesterday’s close, are worth just under $12 million.
This is yet another thing to suggest that AREN is being pumped. Yet, it isn’t. Some people around the message boards argue that the promotion has already started, but we have yet to intercept any emails, landing pages or hard mailers.
But does this make AREN any less risky? We’re not so sure.
