Research OTC & Co Promote The Hell Out of Earth Dragon Resources Inc (PINK:EARH)

If you were running a business that has been going nowhere for 5 years, what would be your best option? Well, you could either change course or file for bankruptcy. As it seems, Earth Dragon Resources Inc (PINK:EARH) has opted for the former rather than the latter. As a result, the company has not only lost its current reporting status, but also fallen victim to paid promotions more than ever. Yesterday, select investors unleashed yet another pump job on the stock.

Indeed, when we checked out our promotional database for any recent updates, we came across a handful of emails touting EARH. After sorting them out, we could easily spot a two-pronged promotion organized in support of the stock. As it is, EARTH is promoted by the WFWS Consulting Group, on the one hand, and Stock Runway, on the other. The former, whose affiliates include such promoters as Research OTC, Whisper From Wall Street and OTC Stock Exchange, has received $5,000 from Mantle Media LLC, while the latter have been compensated $12,500 by Whydah Communication Inc. Has all that hype done the stock any good, though?

Opening at $0.334, EARH shares peaked at $0.37 and hit a daily low of $0.28 before closing trade at $0.296 per share, down 7.60% from their previous close. Thus, if you got in at the open, the most profit you could possibly have raked in is a mere 10.77%, a figure which does not really resonates with what the people behind the scheme might have expected. Today’s development does not help them one bit, either. Roughly two hours into the session, EARH stock is down a further 12% and the downward trend shows no signs of slowing down.

With EARH‘s endeavours to uncover precious metals through conventional mining operations proving a catastrophic failure, the company has now decided to look for them … on the sea bottom. In this respect, EARH acquired a Nevadan private corporation called Project X, Inc. in February, 2012 with the purpose of starting a joint venture with Deep Marine Salvage. Although the information we found on the latter was rather scarce to say the least, it is actually a company fully committed to salvaging as much of the precious metals presumably available on sunken ships all over the world as possible. Since salvage operations won’t commence until May, 2013, let us now focuse on EARH‘s core shareholders.

Without going into too much detail, EARH acquired all of the outstanding stock of Project X by giving J. Michael Johnson and Jason A. Sunstein (the sole shareholders of Project X) 4 million shares of restricted EARH stock each. Now, there is a paid promotion on EARH and we cannot be sure if those shares are still restricted. We did a quick background check on Johnson to see whether he might have any relations with other businesses. Here are the companies related to him:

• Blue Sky Petroleum, Inc. (OTC:BSKY) -> president, CEO, CFO and Secretary owning 55 million shares, i.e 53.8% of the total O/S
• Flux Power Holdings Inc (PINK:FLUX) -> Director of Esenjay Investments LLC, a corporate lender owning 43% of the company’s total O/S
• Oceanic Research & Recovery Inc (PINK:ORRV) -> CEO, presumably one of the four undisclosed beneficial shareholders.

We shall keep a watchful eye on prospective promotions on the aforementioned stocks to see how their volumes will behave.

Finally, we would rather stay away from EARH shares for the time being for one more reason. Surprisingly enough, the vast majority of penny stocks which used to get promotional coverage by ResearchOTC and the likes have all incurred substantial damage in terms of market value, thus forcing hundreds of investors to throw in the towel before nullifying their pockets altogether. Check out how the shares of Primco Management Inc (OTC:PMCM) and PTA Holdings Inc (PINK:PTAH) performed on the charts shortly after the promotional hype was over.