Gray Fox Petroleum Corp (OTCBB:GFOX) Sets its Sights on $2 Again

The number of promotional newsletters taking part in the pump for Gray Fox Petroleum Corp (OTCBB:GFOX) is huge. Nearly seventy alerts have been received through the email from a range of outfits, the most prominent of which is, perhaps, David Cohen and his Research Driven Investor newsletter.

A number of emails redirected investors to the specially set-up landing page (written by Tobin Smith) and the combination of the two pumping vehicles was doing a rather good job. Back in November, when the whole thing started, GFOX surged above the $1 per share mark. There was some hesitation during December, but, with the start of the new year, investors got seriously fired up. Lots of buying pressure pushed the ticker way above the $2 per share mark and the heavy volumes suggested that it could go further up.

On January 24, the newsletters decided to take a little break and this, it seems, was enough to bring the stock to its knees. Two sessions of selling followed during which GFOX managed to slash 33% of its value. While some of the optimistic investors around message boards and social media websites claimed that this is nothing more than a healthy consolidation, realistically, it looked like further drops were inevitable.

Then, however, the pumpers decided to come back with a vengeance. More than ten alerts from Lions of Wall Street, Investor Soup, Beacon Equity, Stock Palooza and a few other newsletters were received in a matter of four days which means that the ticker is flying high once again.

Last Thursday ended with a 10% bounce and on Friday, another 7% were added. The new week began with just under 12% in gains and a dollar volume of over $1.1 million. GFOX stopped at $1.98 yesterday, but, after forty-five minutes of trading today, we can see that breaking through the $2 per share barrier won’t be a problem. As of the time of writing this article, GFOX stands at $2.06 which is around 4% above its previous close.

Traders are happy once again and the investments of those who jumped in on time are growing. Sooner or later, however, the big promotional budget will run out which means that the pumpers will need to move on to their next picks. We already saw that in their absence, GFOX isn’t exactly the best performer. Which, when you do a bit of research, isn’t really that surprising.

The company hasn’t issued a press release since December 9 and although an 8-K form published on January 29 suggests that GFOX have engaged Gaffney, Cline & Associates who will do a technical and due diligence report on the West Ranch Prospect, they are still not able to provide us with deadlines for the start of the exploration process.

At the same time, the market cap is growing and, at $2 per share, it amounts to nearly $72 million. A figure that can not be justified by the financials found in the latest 10-Q. Here’s a summary of GFOX‘s strengths and weaknesses once again:

• cash: $29,084
• total current assets: $41,146
• current liabilities: $23,595
• no revenue since inception
• quarterly net loss: $209,139

They did raise $80 thousand by selling restricted shares to a Marshall Islands-based entity called Rooftop Investments Ltd, but even with this cash injection in mind, the prospects aren’t too bright.

All in all, if the ticker is to put on any sort of steady performance in the long run, the company will need to convince us that they are able to explore and make money out of the oil and gas properties. At the moment, this seems somewhat elusive which is why treading very carefully is absolutely essential.