Pumpers are Getting Impatient with GREENESTONE HEALTH (OTC:GRST)
According to our database, a total of 8 emails costing as much as $77,000 were sent out during the current promotional effort for GREENESTONE HEALTH (OTC:GRST). That’s a lot of excitement and a lot of money paid for not much in terms of stock performance.
Until yesterday, that is. We’re now just a couple of hours into today’s trading session and GRST have lost as much as $0.17 of their price. This amounts to a whopping 39%. Of course, the extreme volatility of these stocks means that the ticker might manage to recover by the end of the day, but if the downward trend continues, it could be a sign that the pump effect is finally kicking in.
When we say “the pump effect” we are referring to the way penny stocks companies and their shares perform once the hype from all the newsletters and press-releases is subdued. To find a couple of examples of this phenomenon, we checked the 
track record of the newsletter that sent out the last email on GRST – Email Stock Picks.
They were part of the promotional campaign on Colorado Gold Mines, Inc. f/k/a Cascade Springs Ltd (OTC:CGLD) that took place on March 4 and March 5. The chart on the right shows how horribly wrong it ended up for the investors who bought in on the hype.
Much the same thing happened when Email Stock Picks tried to pump Crown Marketing (PINK:CWNM) in February. A lot of emails flew around during this particular awareness campaign, but when they stopped, the results were devastating.
We researched and wrote about both CWNM and CGLD, and we feared that these crashes were inevitable. We were right and there is a very good reason for this – the companies behind those tickers are in a terrible financial state with little hope for them getting back to their feet any time soon.
There were so many emails about GRST, that we couldn’t just let it pass by unnoticed. We checked their financial state as well and, as you might have read in our previous articles, we found that things are not looking up. Here is a recap of their latest financial statement once again:
- cash: $301 thousand
- current assets: $433 thousand
- current liabilities: $4.4 million
- revenue: $1.3 million
- net loss: $417 thousand
Indeed, unlike some of their counterparts, GRST have registered some respectable revenues during the last months, but that is not enough for them to achieve the thing that everybody is striving for – profitability.
Another thing that made us quite dubious about the long-term success of the promotion was the fact that they have recently increased the number of authorized shares from 100 million to 500 million. This is a hint that some massive dilution could follow soon and it’s an especially big red flag when we’re speaking of promoted penny stocks.
The fact that all the emails are garnished with optimistic announcements on part of GRST is also a symptom that we’re all too familiar with. Most promotions are characterized by it and, as evident from the examples above, things often go pear-shaped.
We can’t be sure if today’s session will be the downfall for GRST or if they will manage to hang on for a little bit more, but we fear that the outcome is inevitable. This is also why you should always weigh the risks carefully before jumping in on the hype created by emails and press-releases.
