Pumpers Keep Dredging New Western Energy Corp. (OTC:NWTR)
New Western Energy Corp. (OTC:NWTR) managed to claw its way to a green close on Friday after dropping in the morning and hovering around $0.07 through the day. The stock is trying to get back to its initial pump highs of over a dollar per share as a new round of pumps has been launched.
NWTR has been repeatedly pumped for over a month now, starting in mid-December. The pumping heated up and crashed to below pre-pump values. However pumpers are still hammering their subscribers with emails touting NWTR stock. One of the most persistent among pumpers seems to be the Research Driven Investor (RDI) pump newsletter, run by David Cohen. On Friday RDI came up with a new pump mail, telling subscribers a certain Mr. Joe Cotton set a price target of $5.00 for NWTR stock. Once again, this looks like a case of pumps-within-pumps for NWTR.
In addition to the sum of at least $35 thousand paid to RDI for the promotion, the quoted report by Mr. Cotton was also a paid promotion of the stock. As the disclaimer of the Cotton’s Technically Speaking report on NWTR discloses, Mayfair Capital paid $15,800 for it. The money came from “a shareholder(s) of the featured company”. Quite logically, when you’re paid to advertise something, you can say pretty much anything about it, including a wildly conjured price target.
NWTR is a company prospecting land for natural resources. Their latest financial report available is dated September 2012 and contains the following figures:
- $33 thousand in cash
- $283 thousand in current liabilities
- $105 thousand quarterly net loss
The company’s press releases mostly hype news surrounding a newly acquired lease of land in Oklahoma. The 8-K filed for the acquisition doesn’t detail the amounts of possible reserves and explains that the company issued 400,000 new shares and two promissory notes for $300 thousand to pay for the lease, as the company didn’t have enough cash at its disposal.
Promoters Research Driven Investor ran other paid pump jobs in the past. Sadly, those usually turned sour for investors really fast. One example is the pump RDI ran on Immunovative, Inc. (PINK:IMUN) in November. When the promotion was over, the stock dropped rapidly and is currently trading about 80% down from the peak of the pump.
Investors are generally advised to be particularly careful with promoted penny stocks. Their price movement and trading volumes are largely fueled by the promotions and cannot be predicted. Do your own research and don’t believe every bit of hype sent into your mailbox.
