Global Earth Energy Inc (OTCMKTS:GLER) With Yet Another Spike
To say that Global Earth Energy Inc (OTCMKTS:GLER)’s long term shareholders have had a rough time over the last couple of years would be an understatement. Not only has the share price plummeted (in July 2012, for example, just two months after the latest reverse split, the value stood at around $0.11 per share), but they’ve also witnessed multiple changes in the business plan none of which has led the company to even moderate levels of success.
With that in mind, the annual compensations of the people running GLER seem somewhat steep. Both the company CEO, Mr. Sidney Harland and his wife, Betty-Ann (who is a Chairman of the Board) receive as much as $220 thousand per year as well as $12 thousand in car allowance.
On the whole, GLER doesn’t seem like the most attractive proposition out there. After the recent surge, the ticker stands at $0.0032 per share and this brings the market cap to over $1.3 million which might not seem like much at first glance, but when you take a look at the latest financial statement, you’ll see that it is quite a lot (as of May 31 the company had NO assets). Value for money-wise, the stock seems to be downright appalling. Or is it?
Well, it would appear that the management team are once again trying to lure investors in with projections about millions of dollars in revenues in the very near future. In August 28, they announced that they have completed a 20% stock swap agreement with an entity called Hawk Manufacturing, two weeks later Hawk informed us that they are about to complete no less than four major acquisitions of operating companies and now, just two months after the first PR, one of the mergers has been completed while a second one is coming very soon. That’s what they say, anyway.
On September 27, GLER issued a press release according to which Hawk Manufacturing have closed the acquisition of Trump Equipment – a company with 48 full-time employees, more than $15 million in annual revenues and EBITA of more than $2 million. The purchase was done through an equity transaction and is valued at $9.5 million.
On October 17, another announcement came through, this time informing us that Hawk will soon be the proud owners of SWING Machinery and Equipment – an enterprise with 57 years of experience as a distributor of a line of hand tools and saw blades. According to the press release, GLER‘s partner will close the deal on or before December 1 and will get the money from its financing facilities.
Both pieces of news sound extremely exciting and just a quick look at GLER‘s chart reveals that investors are quite convinced that the company will finally start making some revenues. So much so, in fact, that the increased interest managed to push the ticker by no less than 190% in a matter of just five intense trading sessions.
The thing is, we’ve seen it many times in the past. In our previous articles, we mentioned that announcing joint ventures, partnerships and acquisitions has been something of a daily activity at GLER. You can see that none of the agreements worked and, right now, with the latest financial report giving us data that is four and a half months old, if you decide to jump in, all you have to rely on is the optimistic projections coming from GLER‘s PR department. Should you do it?
It’s up to you, but in the meantime, we found something interesting in the 10-Q covering the quarter ended May 31. During that period, one of GLER‘s creditors, Asher Enterprises, converted a little over $35 thousand worth of debt into more than 97 million common shares. Will Asher hold the stock and wait for the expected growth? Time will tell, you should probably bear in mind that the New York-based investment company has something of a reputation for being providers of toxic financing. Penny stock traders are not particularly happy when they see Asher’s name and looking at charts belonging to ventures associated with it (like SK3 Group Inc (OTCMKTS:SKTO)’s one), we can see why. Make sure you do a lot of due diligence and consider the risks carefully before making any decisions that might prove costly.
