Geo Finance Corp. (OTCMKTS:GEFI) Receive Another Paid Pump
Yesterday investors showed unprecedented interest in the stock of Geo Finance Corp. (OTCMKTS:GEFI). Over 10.5 million shares changed hands and the stock closed the session with a gain of 27% at $0.0242. Despite the impressive result the closing price was actually lower than the opening price of $0.025.
So, what was the reason that sparked the intensive buying? Well, on Tuesday GEFI finally broke their eight-month long silence and published a new PR message. In it the company announced that they have entered into an agreement to acquire Enterprise Asset Management (EAM) and their Tanaris Power brand of advanced industrial vehicle lithium-ion batteries. While the press releases did attract significant attention it was not enough to push the ticker up the chart and that day the stock slid down by 4.5% to $0.019. Maybe investors found out that a month earlier another company – Recursos Mont SA (OTCBB:REMO), already signed an agreement for the purchase of the same company.
The deal with REMO most likely didn’t come through though because GEFI issued another PR a couple of hours after the end of Tuesday’s trading. This time they revealed that the company is going to produce a custom evaluation battery, part of the Tanaris battery brand, for United Airlines, Inc (UA). As we said this time the press release had a much bigger influence on investors’ sentiment. But can GEFI keep their current price gains?
Well, the battery for the UA will have an evaluation period of 90 days and if Geo Finance slip into silence once more interest in the stock could dry up. Not to mention that their financials are not exactly inspiring. The quarterly report for the period ending July 31 shows the following results:
• $14 thousand cash
• $115 thousand total current assets
• $418 thousand total current liabilities
• ZERO revenues
• $162 thousand net loss
With such limited resources it is quite curious how are GEFI going to pay for the announced acquisition.
There is, however, and even bigger red flag that investors should consider – the paid pump that has been touting the company since Monday. Initially the disclosed compensations were rather negligible ranging from $3000 to $7000 but on December 9 the affiliates of Damn Good Penny Picks joined the promotion for the sum of $20 thousand. This is far from the first time that GEFI have been targeted by paid pumps. The same happened back in March when the stock registered traded volumes comparable to yesterday’s. If you take a look at our article from January, 2012, you will see that the company was pumped even back then.
Without the artificial hype and with depressing financials GEFI might begin correcting. If you haven’t already established a position in the company it is extremely important to do your own due diligence before attempting any trades.
