Dan Green Revisits Pump on Bluforest Inc (OTC:BLUF)

You might be surprised to learn that Bluforest Inc (OTC:BLUF) got promotional coverage yesterday when Five Dollar Movers, a/k/a Dan Green, sent out an email designed to tout BLUF shares for Tuesday. The mail was said to cost $15,000 paid by third party Derry Partners Ltd. and is the first from a series of alerts which are aimed at pumping the stock for the next 30 days or so. Is the pump job doomed to succeed or will it just tank?

Judging from BLUF‘s market performance yesterday, the campaign hardly made any difference. Opening at $5.14, down 2.1% from its Monday close, BLUF stock never went beyond that mark. On the contrary, the stock also hit a daily low of $1.27 before closing at $5.10. The conclusion is clear and simple: while the campaign failed to give BLUF a boost, it certainly helped empty the pockets of the vast majority of investors who got in totally mislead by the Five Dollar Movers. At least, the volume was by no means as high as it used to be, which means that the investor damage might have only affected a handful of traders.

So, why did the pump job fail to live up to expectations? The email touting BLUF presented the company as an imminent SEC “accelerated” filer. Is that really the case, though? To become an accelerated filer with the SEC, your company’s float must be worth at least $75 million while not exceeding $700 million. Looking at BLUF‘s financials this is not the case at all. At $5.10 per share, the company’s market cap stands at $17.7 million, which is nowhere near the required threshold.

On closer examination of the company’s stock policy for the last 12 months, we quickly figured out that BLUF‘s current market value might actually be way overvalued. What we have got here is a couple of reverse stock splits – a 1-for-500 and a 1-for-30 – executed in March, 2012 and January, 2013, respectively. The cumulative effect from this action has reduced the total number of outstanding shares by a denominator of 1500, which means the decimal place of BLUF‘s current market price has moved three spaces to the left. Given the severe lack of stable financial assets shown on the company’s most recent reports, we highly doubt that even those $17.7 million tell us anything credible about the trader of carbon offset credits.

Finally, the promoter in charge of the current pump job on BLUF was also responsible for a previous, much-bigger advertising effort on the same stock. Launched on Feb. 12 at noontime, the pump triggered a 17% appreciation in terms of market value within the corresponding session before dwindling away.