Falconridge Oil Technologies Corp. (OTMKTS:FROT) Barely Keeps Its Gains
What do you think the market cap of company with less than $1000 in cash, less than $1500 in revenues and $1.8 million in current liabilities should be? That is right – $54.4 million. That is the market capitalization of Falconridge Oil Technologies Corp. (OTCMKTS:FROT) after yesterday’s trading.
The discrepancy becomes less surprising when you take into consideration the fact that we are talking about a pennystock operating in the always popular oil and gas industry and that at the same time it is the target of paid pump.
The promotion began last months with the creation of a landing page by the Moskowitz Report. Although the disclosed budget is not that impressive – $125 thousand, by November 5 the pump had managed to push FROT to a high of $1.26 per share. Even though the stock crashed horribly immediately after that and in 3 sessions wiped 40% of its value investors still flocked to it. All it took were a couple of email alerts and the ticker returned to $1.09 this Wednesday.
Yesterday’s performance wasn’t nearly that impressive. In fact, for most of the session FROT was trading in the red even slumping to an intraday low of $0.98 but it managed to recover and actually closed the day with a gain of nearly 2% at $1.11.
As is almost always the case with pumped stocks if you dig a bit deeper into the official filings of the company you would find millions of extremely cheap shares that were sold in the past. Specifically for FROT in 2008 a group of investors acquired 3.25 million shares by paying just $65 thousand. In 2010 a 6-for-1 forward split was performed and these people now owned almost 19.5 million shares that if dumped at the current prices could bring millions in gains.
If the stock is starting to hesitate it could mean another severe correction. Having already crashed once the artificial hype won’t be able to support the stock for long. Even if you are determined to play the pump be sure to use caution and to weigh all the risks before putting any money on the line.
