PacWest Equities, Inc. (PINK:PWEI) Up on Acquisition News
Yesterday PacWest Equities, Inc. (PINK:PWEI) gapped up about 20% at the open and closed the day 22% up, at $0.30 per share. The surge was probably caused by a press release by the company.
After a pump campaign drove PWEI up to $0.36 in early February and the price crashed back down to $0.22 in a matter of a week, the next promotions for PWEI were about the company’s acquisition of assets from a NASDAQ listed company. While the round of pumps was still active, we covered the company and looked at some of the curious details surrounding the deal. PWEI finally came up with news on the matter, announcing they have acquired solar technology assets from DayStar Technologies, Inc. (NASDAQ:DSTI).
The release claims the acquisition was valued at $55 million by unnamed ‘analysts’. PWEI being a pink sheet company, has not issued a 8-K filing to reflect the supposedly significant deal. The most recent filing of the company is a yearly report dated December 2012 that contains the following:
- $49 thousand in cash
- $23 thousand current liabilities
- $63 thousand in yearly net loss
- no current source of revenue
Being a company that finances itself through issuing stock, it’s safe to assume that PWEI will be paying for the acquisition of the solar technology assets by issuing more common stock. In late 2012 PWEI issued 455 million shares to acquire green technologies from World Eco Source Corp. – now a subsidiary. With 2 billion authorized shares and 1.41 billion issued and outstanding, there is plenty of space for dilution. PWEI seems to be in a hurry to acquire more new technology before leveraging its World Eco Source acquisition and putting it to revenue-generating use.
Traders following PWEI for some time may remember the pump fiasco of November 2012, led by Preferred Penny Stocks (PPS), which crashed within days, burning many hopeful investors. Back then PPS pocketed their usual $500 thousand for their advertising efforts.
Even though there is no detectable organized pump campaign for PWEI at the moment, the news of a pink sheet company acquiring assets from a NASDAQ enterprise seems to be enough to get more excitable traders buying. Considering the past history of pumps for PWEI and the fact that it is currently valued at $431 million at its last closing price, despite the fact that it generates no revenues and finances itself by issuing stock, more cautious investors may want to sit this one out.
