Black Stallion Oil and Gas Inc (OTCMKTS:BLKG) Sails Past $2
Black Stallion Oil and Gas Inc (OTCMKTS:BLKG) logged its fifth consecutive green session yesterday. It closed the day with a record-breaking dollar volume of over $1.2 million, a new 52-week high, and a price of $2.10 per share. In other words, it’s performing quite well.
Why, then, are people saying that it’s about to experience a major pullback in the coming days?
There are a few things that could be making investors a bit apprehensive about BLKG‘s future. The name of the company CEO, for example, could cause concern among some of the more experienced traders.
BLKG is headed by a certain George Drazenovic at the moment and the ones who have been interested in the OTC for the last eight years or so might remember that he was once involved with a company called Sun Cal Energy (traded under the SCEY symbol). SCEY (which was eventually revoked by the SEC due to delinquency in its filings) was once promoted through some emails that, according to many people around the internet, were illegal.
Of course, a lot of investors will tell you that the events from eight years ago can’t impact BLKG‘s current state of affairs. The latest 10-Q, however, can. And it’s not too pretty:
- cash: $8 hundred
- total assets: $9 thousand
- total liabilities: $12 thousand
- NO revenue
- quarterly net loss: $24 thousand
That’s where an interesting question pops up: “If BLKG‘s financial statement really is so horrifying, then why are people jumping in?”.
This is all due to a paid pump that’s starting to pick up more and more speed. A promotional outfit called Wall Street Report received $50 thousand, and they put together a landing page that places a price target of over $45 per share on BLKG. There’s also a lengthy video in which a person called Chris Porter speaks about the company and how great of an opportunity it presents. It all looks suspiciously similar to what Mike Statler from Stock Tips did in his hay day.
The pumpers shouldn’t get all the credit, though. BLKG themselves issued a peculiarly timed press release which coincided with the start of the promotion and said that the company is about to begin the exploration process of the Woodrow Prospect in Montana. What it didn’t say was how they plan to do any sort of exploration with $799 in the bank.
As you can see, a few minutes’ worth of research will reveal one or two red flags. A deeper poking around will set off a few more warning lights, but if you really are thorough enough, you’ll get to the real problem and you’ll see just how careful you need to be when playing with BLKG.
The big threat comes from the fact that in September 2012, some investors bought a total of 19,872,000 shares (as adjusted for the 60 for 1 forward split from 2013) for just $49,680. These investors might be eager to sell their discounted stock.
About fifteen minutes after the opening bell, BLKG is sitting at $2.18, another 3.8% in the green.
