Geo Finance Corp. (OTCMKTS:GEFI) Crashes Without The Pumpers

On December 8 a new paid promotion for Geo Finance Corp. (OTCMKTS:GEFI) began. At first the involved pumpers disclosed rather negligible compensations ranging from $3500 to $7000 but then the affiliates of Damn Good Penny Picks joined the campaign.

Penny Stock Newsletters, Penny Picks, and Prepump Stocks, to name a few, sent out a wave of email alerts around the closing bell on Tuesday. Their compensation was quite a bit higher – $20 thousand. On the next day GEFI exploded with over 10 million traded shares closing the session with a gain of 27% at $$0.242.

The company also did its part in luring investors in by issuing not one but two PRs on December 9. In them GEFI announced that they are going to acquire Enterprise Asset Management and their Tanaris Power brand of lithium-ion vehicle batteries. Furthermore the company is going to produce a custom evaluation battery for United Airlines Inc. The news was substantial but in our previous article we warned you that Geo Finance might be unable to keep their price gains without the artificial hype created by the paid pump.

It seems that we may have been right because with Penny Picks moving on to their next target  GEFI was left to trade on its own and yesterday it crashed hard. For around an hour after the opening bell the ticker remained stable but then it plummeted for the bottom of the chart and stayed there for the rest of the trading day. In the end GEFI had wiped over 13% and returned to $0.021 per share.

There certainly isn’t a shortage of reasons for investors to be skeptical. The battery for United Airlines will have an evaluation period of 90 days and even then the outcome of the tests is not guaranteed. In the meantime GEFI’s financial state could cause them troubles. The company finished the quarter ending July 31 with the following financial results:

• $14 thousand cash
• $115 thousand total current assets
• $418 thousand total current liabilities
• ZERO revenues
• $162 thousand net loss

So far the issuance of shares has been kept in check but that may change in the future if the company is forced to sell some equity in order to cover their expenses.

With a history of numerous paid pumps and its depressing financials GEFI is definitely not among the safest choices out there. It is paramount to do your own due diligence before attempting any trades involving the stock.