Pan Global Corp. (OTCMKTS:PGLO) Rears Its Head Again

Yesterday, Pan Global Corp. (OTCMKTS:PGLO) had a spectacular session. This, however, doesn’t mean the danger is over.

PGLO managed a spectacular 29.55% increase and closed at $0.57. The volume reached 3.7 million shares. Still, both the price and the volume were nowhere near their previous highs from before the crash on Nov. 5.

Over the weekend, Stock Tips, the newsletter used to pump PGLO, used one of the all time favorite pumper ideas – the “short squeeze”. The basic idea is that traders who shorted the stock need to buy shares to cover what they had borrowed. They have limited time to do so, and when time runs out they have to buy at the ask.

In theory, such a scenario is possible. However, in the case of PGLO anyone who had shorted the stock also had plenty of time to cover. There is a reason pumpers often use the “short squeeze” to tout companies after they have crashed following a pump job.

A short squeeze doesn’t need to occur for it to look like it did. The hype created by the suggestion that a squeeze can occur is often enough for a couple of sessions in the green. While such bounces offer a chance for a quick profit, just like the initial pump runs, they hold an extremely high risk as it’s impossible to be sure when the price will plummet again.

So far today, PGLO is still climbing. At the time of this writing it’s trading around $0.69 per share.