Delaine Corporation (OTCMKTS:DEPN) Crushed By Pump
What could cause a stock that has an average volume of 20 thousand traded shares and that since the start of September has registered only 11 sessions with any trades at all to suddenly shift over 2.5 million shares in a single day? The answer should be obvious to those who have followed the world of pennystocks even for a short amount of time – a paid pump.
After the end of Wednesday’s trading we began receiving email alerts touting the stock of Delaine Corporation (OTCMKTS:DEPN). Early in the morning on the next day the efforts to create as much artificial hype as possible continued with another wave of emails. The promotion certainly caught the attention of the market and the stock opened with a gap up at $0.117. Unfortunately for all those who believed the pumpers the massive dumping of shares quickly brought the ticker in the red and when the closing bell rang DEPN had wiped over 36% of its value and was sitting at $0.0575.
The dreadful performance doesn’t affect the pumpers though. Darth Trader and The Stock Psycho disclosed a $20 thousand compensation for their services while Penny Stock Circle and 1-2-3 Stock Alert bagged $30 thousand. The paying party for both groups of pumpers was the same – Cream Consulting.
The question is who benefited the most from the increased attention? Well, just two days ago DEPN filed their annual report for the fiscal year ending June 30 so let’s take a look. For a company that sees almost no trading the reported numbers look quite encouraging:
• $123 thousand cash
• $225 thousand total current assets
• $71 thousand total current liabilities
• $672 thousand net revenue
• $94 thousand net income
The sums may not be that big but the balance sheet is solid. Not many pennystocks can boast having a net income of nearly $100 thousand while at the same time having no outstanding convertible notes. Still, in the past DEPN have issued quite a lot of extremely cheap shares in order to fund their operations.
Between June 30, 2011 and June 30, 2012 they issued 4 million shares at just $0.06 but some people got even cheaper shares – around 6 million were sold at $0.0016. During the next fiscal year 13 million shares were issued for services totaling $65 thousand. Having in mind that DEPN doesn’t have an active market it is more than likely that the people who received the shares still own the majority of them.
DEPN’s operations may be moving in the right direction but at the moment they are not enough to support even the current market cap of the company of $3.7 million. With the end of the pump interest in the stock might once again vanish and all those who failed to cash in during yesterday’s trading might be stuck with their shares for quite a while.
