Golden Edge Entertainment Inc (OTCBB:GDEE) Finally Picking Up Speed
In case you haven’t heard already, Golden Edge Entertainment Inc (OTCBB:GDEE) is being promoted. Equities That Soar, (a newsletter that can be tied to Elite Penny Stocks) and My Soaring Penny Stocks (a relative newcomer to the promotional world) have spent the last week or so trying to convince you that GDEE “could be the best investment you make”. They did that in exchange for a grand total of $37 thousand.
The stock performance has been typical for a promoted OTC ticker. First, on Monday, GDEE shot up and added a massive 90% to its value. On the next day, however, it tumbled down by about 16%. Nevertheless, Wednesday brought another green session and after a somewhat modest 8% gain, GDEE closed the day at a little over $1 per share. This, as it turns out, was the calm before the storm. Yesterday, the stock surged by a remarkable 48% and, after hitting a 52-week high of $2 per share, it stopped at $1.59.
In other words, GDEE provided quite a ride for the thrill-seeking penny stock trader. Interest wasn’t too strong initially, but yesterday, GDEE managed to log about $262 thousand in dollar volume which goes to show that more and more people are falling for the pumpers’ optimism.
On the one hand, this could be a good thing. Lack of liquidity and interest from the investment community are problems that many penny stock companies face, and as we can see, at least for the time being, they’re no longer an issue in this particular instance. When it comes to GDEE, however, there are some far bigger problems that need addressing first.
The latest 10-Q, for example, hoists some major red flags. Thanks to it, we learn that the company is based in a virtual office. We also learn that GDEE, which said recently that it’s going to make an impact on the augmented reality industry, had the following financials at the end of March:
- $20 thousand in total assets
- $8 thousand in liabilities
- no revenues whatsoever
- a quarterly net loss of about $8 thousand
The people who have jumped in without taking a look at these figures might be having some second thoughts at the moment, and if they go on skimming through the financial report, they might be put off even further.
At the end of March, the management team decided to alter the terms of some warrants which were issued a few years ago. As a result, instead of paying $3 to $6 per share, the holders of these warrants got 400 thousand shares at a price of just $0.05 apiece. When the report came out, there were a further 4.6 million warrants exercisable at the same price.
If the warrants get exercised and if the discounted shares flood the open market, GDEE will find itself in trouble, but apparently, investors aren’t that concerned. About fifteen minutes after the opening bell, the ticker is a further 10% in the green.
