America Resources Exploration Inc (OTCBB:AREN) With a Dangerous Move Towards the $1 Mark
America Resources Exploration Inc (OTCBB:AREN) closed quite a few acquisitions over the last few weeks. First, at the end of July, the company added some producing oil wells in Texas to its portfolio and four days later, they purchased fractional interest in oil and gas wells in Oklahoma. Then, some leases in Utah were added, and yesterday, AREN announced the acquisition of interest in two more wells in Shelby County, Texas.
The news is good, and the stock performance is pretty remarkable as well. The ticker logged its first properly active sessions at the end of last month when it was sitting at less than $0.20 per share. Yesterday, it registered a dollar volume of more than $4.5 million, it hit a 52-week high of $1.30, and it closed the day with a price of $0.975 per share.
Investors appear to be pretty happy with the company and in light of the news, this isn’t really that much of a surprise. But why is there a Caveat Emptor sign stamped on AREN‘s OTC Markets profile?
Because the stock is targeted by what has to be one of the biggest promotional campaigns of this summer. The pump started at the end of last month and at the beginning, the only outfits touting the stock were Best American Stocks as well as the rest of the newsletters associated with Elite Penny Stocks. Later, some more newsletters jumped in which means that we have received more than thirty emails since the beginning of the month. The total compensation sits at $230 thousand.
The OTC Markets saw the pump and the hype it was creating and they decided to put a skulls and crossbones badge on the company profile. AREN, on the other hand, responded with a press release (which, unlike the rest of the company’s announcements, wasn’t release through the major PR distribution networks) and said that they have nothing to do with the promotion.
But what does all this mean for the regular investor like you?
It means that AREN is an extremely risky stock. Indeed, it has put on quite a show over the last few weeks and it has already presented a lot of people with opportunities to make some hefty profits. When the pumpers are around, however, violent crashes tend to happen with little or no warning. Especially when there are millions of discounted shares floating around.
And as we established at the very beginning of the pump, a little less than a year ago, some people acquired 35 million shares for just over $20 thousand. Those people could be eager to sell while AREN is still hovering around the $1 per share mark.
Even if you disregard these major red flags and even if you reckon that once the pump is over, the company is going to succeed, you still mustn’t forget that the Caveat Emptor badge and the massive volumes are drawing quite a lot of attention to the stock. The regulatory organs might decide that it’s finally time to put an end to the pump and if they do that, the losses will be quite devastating. Treading extremely carefully is definitely a good call.
