FuelStream, Inc. (OTCMKTS:FLST) Ends Golden Series

We kept asking when FuelStream, Inc. (OTCMKTS:FLST) would break its trend, and now we have the answer. Mid-week, FLST lost more than 12% on $880,000 selling volumes, sliding back to 34 cents. Whether this would be a minor glitch or the beginning of a trend is a guess, but it seems the effect of promotional efforts could not last forever without investors deciding it is time to realize profits.

For FLST, the selling is in earnest, coming close to the daily buying volumes of the past few days. The drop is small, but FLST has shown that around this price range, there is the possibility to wipe out a lot more, like the 50% between 50 and 25 cents at the end of July.

But the fall coincided with a strange bit of news, stating an unregistered sale of 1.8 million shares for a sum unannounced in the 8-K filing. The company believes those shares exempt from registration with the SEC, but this does not change the fact that the amount is significant and could easily sway the market if the investor decodes to sell.

On the plus side, FLST announced it paid $164,000 toward redeeming a convertible debenture from Peak One Opportunity Fund, L.P. , thus attempting to deleverage and improve its financials. But one wonders what improvement could come for already depressed results:

• Zero cash

• $180,000 assets (receivables)

• $5.5 million total current liabilities

• Zero sales

• $579,261 net loss for the latest reported quarter

Given that the company had zero cash, it is strange where it took the funds to wire-transfer to Peak One. In any case, FLST holds too many red flags, and the exit of investors has many reasons to happen, triggered by anything.

Other oil companies are currently making the rounds, with various disparities between their stock price and the underlying business. Petron Energy II, Inc. (OTCBB:PEII) lost another 20%, erasing some of Tuesday’s gains, retreating to 3 cents.

Inversely, North American Oil&Gas Corp. (OTCBB:NAMG) is peaking at $1.40, on buying volumes above $80,000, posing the question when the price, relatively high for a penny stock, would track back.

Penny stocks often allow a great choice of oil and gas companies, but it is best to discern their true qualities with your own research, and avoid the overly hyped, promoted tickers. Those are most at risk of a sudden and painful correction, which wipes out a large percentage of investments.