Dragon Capital Group Corp. (OTCMKTS:DRGV) With Some Surprising Figures
Most of the times when we receive a promotional email for a penny stock company, we are pretty much aware of what we have on our hands even before we start our research. We expect to see an enterprise that has just changed the business focus, have hired a new director or has issued a bombastic press release full of projections for future growth. Most of the times we start the research by going through the company’s latest filings and reports and, more often than not, we are faced with some rather disappointing figures. The case of Dragon Capital Group Corp. (OTCMKTS:DRGV) is somewhat different.
Unlike most pumped penny stocks, DRGV have not changed their name, the last pres release that they issued is dated January and what’s even more surprising, they do seem to have the advantage of a relatively strong financial statement. Here are the figures as found in their quarterly report for the period ended on March 31:
- cash: $401 thousand
- current assets: $8.9 million
- current liabilities: $1.3 million
- quarterly revenue: $4.2 million
- quarterly net income: $94 thousand
We must admit that when we saw those financials, we were rather baffled. As soon as we read through the whole report, we wondered: “If they do have so much money in current assets and a steady stream of revenue and income, how come their stock is traded at just $0.0038 per share?”. It’s even more baffling when you have in mind that DRGV have some pretty substantial figures to show in the reports from the previous periods, as well. The total revenue for the fiscal 2012, for example amounts to as much as $20 million and the net income for the same period is $580 thousand, which won’t set Wall Street on fire, but it is still quite a lot for a small cap venture traded on the Pink Sheets.
One reason for the low price of the stock could be the frantic share issuance. For example, the total number of outstanding shares between September 2012 and May 2013 has increased by a whopping 130 million. At the same time the number of authorized shares has jumped from 500 million to 1 billion, which could suggest that more stock is about to see the light of day, offsetting the relatively strong performance in terms of operations.
On the other hand, however, the low price could also be due to the ticker receiving little attention from investors. This is probably why, back on January 15, Bird Gang Stocks decided to perform an awareness campaign on DRGV. Two months later, in March, Stock Appeal LLC, who control quite a lot of newsletters, received $15 thousand from a third party and initiated another DRGV pump. The two campaigns did give the ticker a nudge in the green direction and it scored some impressive gains. The only problem is, as soon as the emails stopped, there were some horrific free falls and on both occasions, the stock was 40% down just a couple of sessions after the ascend had started.
Now there is a new promotional effort for them. The newsletters taking part as of right now are Penny Stock VIP (who received $20 thousand), Hot Stock Ace Publisher (who pocketed $30 thousand) and Wall Street Report (who also got $30 thousand) and if the pumpers’ track records are anything to go by, DRGV could well be in for a massive crash. All of them were part of the campaign on Resource Ventures (OTCMKTS:REVI) back in mid-May and the chart on the right is pretty illustrative of how badly it ended up. While DRGV are in a much better shape in terms of their balance sheet, we’ve already seen that things could turn ugly in a matter of just a few trading sessions. This is why, as always, a lot of research and due diligence are absolutely crucial before making any investment decisions.
