Multi-Corp International Inc (OTCMKTS:MULI) Continue Their Run
After a couple of days in the red on May 7 and May 8, Multi-Corp International Inc (OTCMKTS:MULI) bounced last Thursday by as much as 28% and it would appear that all the touting done by newsletters and press releases is still working. On Friday MULI gained another 20% and closed the week at $0.78 per share.
At that price MULI‘s market cap reached a staggering $58 million and for that sort of money you get a company that supposedly have rights to some oil wells in New Mexico. And aren’t they proud of this fact?
They issued some press releases stating that a report has been made on their properties during the first quarter of 2013 and according to it, the wells contain as much as $79 million in oil and natural gas and today, they woke up early announcing that they have come up with a drilling plan. They say that they’re going to employ the services of a New Mexican company called MCI Operating. We were curious to find some more information on them, but although we checked the first five pages of Google Search, we could find absolutely nothing. But let’s assume for a moment that this is indeed a real company and carry on with the questions.
When is the drilling going to begin? That’s something of a secret, apparently. Either that or MULI themselves have no idea since no deadlines are mentioned in the press release. They only speak about cash flows in 2013 but we simply can’t be convinced by that sort of vague projections and hopes.
Speaking of which, we also have some other doubts. They said that the acquisition of the wells in New Mexico was completed on May 7 and right now they sound as if the drilling is about to start tomorrow, but isn’t it too early to get all excited? Especially when you have in mind that until just over a year ago they were in the business of selling soft drinks.
Furthermore, the properties belonged to a publicly traded company called Quad Energy. (OTCMKTS:CDID) who owned them for quite some time but never managed to develop them. You might argue at this point that CDID have always been in a terrible financial state and that they are currently in negotiations with the U.S. Bankruptcy Court but, truth be told, MULI themselves are in a bit of a mess. Here are the figures as of September 2012:
- cash: $0
- current assets: $0
- intangible assets: $123 thousand
- current liabilities: $476 thousand
- no revenue since inception
- quarterly net loss: $19 thousand
In today’s announcement they say that they are currently researching the opportunities for joint ventures and private placements, but the fact remains that the whole thing is just as vague as the projections for revenues. You might be thinking at this point that we’re being a bit too suspicious, and the reason for this lies in some discrepancies that we found around MULI.
Take their office for example. According to the official filings, MULI‘s headquarters is located at 3651 Lindell Road, Suite D 414, Las Vegas, NV 89103. If you look it up on Google Maps, you will see that it’s nothing more than a regular business building. A handy little trick on Google’s Search, however, reveals that there are quite a lot of penny stocks headquartered in that particular building. There is a reason for this, of course.
If you perform just a regular Google search on the address, you will find that one of the first links available is this advertisement for virtual offices. This means that MULI‘s HQ is probably not located in Las Vegas at all. Not the best of practices, we reckon.
Here’s another thing to consider. When you look up the name of the current CFO (former CEO) of MULI, Mr. Robert Baker, you will see that he was at the helm of a company called Global Resource Energy Inc (OTCMKTS:GBEN). He resigned back in March but if you have been following our articles closely, you will probably know that GBEN have been through quite a lot of promotions before Mr. Baker’s departure. You only need to take a quick look at their chart and you will see that all of the pumps ended in tears.
That is definitely something worth having in mind while you are weighing the risks on MULI and so is the fact that, as we mentioned in our previous articles, the promotional budget for them is absolutely huge. This could result in a more prolonged run compared to the regular pumps, but it could also end in a crash that is even more painful than usual.
