NuState Energy Holdings, Inc. (OTCMKTS:NSEH) Crashes After 2 Fake PRs
On October 6 the stock of NuState Energy Holdings, Inc. (OTCMKTS:NSEH) reached a high of $0.0029. Unfortunately that day also marked the beginning of a steep downwards trend that brought the ticker back to the very bottom of the chart. Investors confidence in the stock has been shaky at best but yesterday’s events weakened it even more.
A couple of hours after the start of the session a PR was published announcing the closing of a $50 million revolving line of credit with TCA Global Credit Master Fund, LP. The initial draw down was reported to be $5 million. Shortly after that another press release hit the web. This time it revealed that NuState have entered into primary talks with SAIC-GM-Wuling Automobile for a license agreement for NSEH’s IP software GPSTrax. SAIG-GM-Wuling is a joint venture between SAIC Motor, General Motors, and Liuzhou Wuling Motors Co Ltd.
Such news couldn’t remain unnoticed and indeed investors rushed towards the company’s stock. The buying pressure pushed NSEH to a daily high of $0.0014 but imagine the surprise of all those who bought in when it turned out that both PRs were not authorized by NuState and were in fact entirely fake. The situation is quite serious – many of those who were lured by the PRs suffered massive losses as NSEH crashed hard and closed 20% in the red at $0.0004. With a record for the company amount of 813 million traded shares and dollar value that surpassed half a million and reached $631 thousand an investigation by the SEC is highly likely.
What is certain though is that NuState is headed for a rather volatile session when the market reopens tomorrow. The conference call scheduled for December 9 should also be quite interesting.
Even before yesterday’s debacle NSEH was still an extremely risky choice. The company hasn’t filed a single financial report for the past year and half with the latest one being a quarterly report for the period ending March 31, 2013. And back then things were looking rather grim:
• $2513 cash and total assets !!!
• $4.5 million total current liabilities
• ZERO revenues
• $227 thousand net loss
In a press release issued on November 6 NSEH stated that the audit of their financials is going according to plan and the first 10-K report should be filed by the end of the month with the company becoming current by the end of January. Well, there are four more days for them to submit this first report.
Recently the number of authorized shares was increased by 3 billion and at the moment it stands at 3.75 billion. With millions in outstanding notes and convertible notes the dilution might be devastating.
It should be obvious that NSEH is one of the riskiest stocks at the moment. If you are determined to trade the stock be sure to do extensive due diligence before putting any money on the line.
