Northumberland Resources Inc (OTCMKTS:NHUR) Digging A Hole In The Ground

As we wrote yesterday, Northumberland Resources Inc (OTCMKTS:NHUR) finished Monday’s session with more than a quarter of the price gone. Yesterday they wiped out another 19% and right now, just a few minutes into the trading session, the ticker is a further 18% below yesterday’s close. This means that the hole in the investors’ pockets is getting bigger by the minute. Is there anything to stop the descend, though?

Well, our first coverage on NHUR went online more than a month ago when our attention was drawn to this particular stock by a couple of emails sent out by Billionaire Stocks. The compensation disclosed was a staggering $3 million and the alerts contained all sorts of optimistic projections about the future. With a budget this big, we knew that the emails couldn’t be the only vehicle through which the stock is being pumped. To our surprise, there was no hard-mailer campaign, but Billionaire Stocks did manage to come up with a fancy-looking PDF report that they uploaded on their website and apart from the colorful pictures and pretty diagrams it also included a short term price target of $3.40 and a long term one of $7. The pumpers didn’t stop there.

The entity in charge of the colossal budget is called Pub Capital, Inc. and they own a website called Financier Times. It has nothing to do with the real Financial Times and instead of bringing serious information, it is mostly used to pump penny stocks with doubtful future like NHUR and, more recently, Sanborn Resources Ltd (OTCBB:SANB). An article came online on the aforementioned website and just like the emails and the so-called report from Billionaire Stocks, it has optimism spurring out of every punctuation mark.

With a promotion this big, we knew that things will not end well, but still, we spent hours of researching everything around NHUR in the hope to see something that will make them survive the promotional pressure.

Unfortunately, we weren’t very happy with what we saw. While, unlike most other mineral exploration penny stocks, NHUR have managed to generate some revenue during the first three months of 2013, it’s rather dismal compared to the figures found in the 10-Q for the same period in 2012. In addition to this, after rummaging around we found that the address that they offer as their corporate headquarters is also offered as a virtual office and that sent us on the trails of the people running the company.

After some more hours of research, we managed to link NHUR‘s management team with some other shady penny stock ventures like National Graphite Corp (OTCMKTS:NGRC), Tiger Oil and Energy Inc (OTCMKTS:TGRO), Black Hawk Exploration Inc (OTCMKTS:BHWX) and Universal Potash (OTCMKTS:UPCO). We went through a ton of filings and we saw that the name of Ken (Kenneth) Liebscher is emerging over and over again. A bit more digging around later, we found that he was once involved with a rather big FBI operation called Bermuda Short back when he was the CEO of a company called ThermoElastic Technologies, Inc.

Considering all these facts, there was absolutely no doubt in our mind that the pump is going to end in disaster, and sure enough, the descend started a couple of weeks ago. On Monday, however, a contributor on Seeking Alpha published an article which basically contained most of the things we listed above, named it (somewhat appropriately) “Northumberland Resources: A Worthless Promoted Stock” and it turned the descend into a free fall.

Things are bad as they are right now, but we’re pretty sure that there are people who are still hoping for some sort of a bounce and are tempted by the low price. If you are one of them, we would advise you to bear in mind that the author of the Seeking Alpha article recommends that traders “short” the stock and if that happens, the losses will get even bigger. Not to mention that the SEC or the FINRA might step in at any time and put an end to the whole fiasco just like they did with Eco Trade Corp (OTCMKTS:BOPT), Polar Petroleum Corp (OTCMKTS:POLR), Biozoom Inc (OTCBB:BIZM) and Norstra Energy Inc (OTCMKTS:NORX). That’s why it’s best to simply stay away from NHUR, unless you are ready to swallow the losses.