Eco-Trade Corp. (OTC:BOPT) Whipsaws, Slashed Half of Value

When a penny stock attracts too much attention, a sudden drop is quite near. In the case of Eco-Trade Corp. (OTC:BOPT), too many buyers gathered, but decided to bail soon after. This is not unusual for small-cap companies, and we could well invent a new collective, “a crash of investors”.

Up until now, BOPT has climbed on its own muscle, promising a lucrative oil drilling plot. The ticker has not seen paid promotion, but made noise with regular press releases in the past few days. This caused a spike in buying volumes, but only a day later record sales pressured the stock down 50% to 19 cents.

As we already reported, BOPT does not find too much support in its fundamental financial strengths, showing only:

• Zero cash
• $483,222 convertible debt, $1.38 million total liabilities
• Zero revenues
• $8,905 operating loss, $74,531 net loss after interest payments and preferred stock dividends

The promise of BOPT hinges on working the Bakken geological foundation, which also means it is the promise of fracking technologies, the ones that were until recently impossible. As it is easily seen, BOPT has little resources to start the expensive method, and revenues are not to be seen in the near future.

The drilling rights in this area are already taken up by larger oil corporations. Since law allows to hold an unexplored lease for 3-5 years, but allows unlimited usage once drilling starts, a lot of companies are eager to put the start on production and keep the potentially lucrative positions. But it is even stranger than BOPT has announced zero assets, not even the value of a lease. Given the high price that leases command, and the pressure to drill soon, BOPT will face challenges securing a foothold in the desirable shale formation. In fact, the company for now has only a material definitive agreement to purchase a plot lease, which means there’s a long way to go until even terrain exploration begins- and there is not even a hint of how a lease purchase would be financed.

The story of BOPT closely resembles that of Norstra Energy Corp. (OTC:NORX), which quickly doubled in price. However, NORX attracted the attentions of paid promoters, and this caused net selling on a few consecutive days, wiping out most of the gains. This penny stock company also tried to ride the fracking boom, but it only managed a short-term boom on the OTC markets.

Oil drilling promises sound solid, but it is best to do your own estimation of risk and acceptable losses before committing to yet another company that promises to solve the energy problems.