Sierra Resource Group Inc (OTCMKTS:SIRG) On a Risky Run
Back in November 2013, Sierra Resource Group Inc (OTCMKTS:SIRG) was being pumped. The campaign wasn’t that big and it wasn’t going particularly well. Volumes were small and although the ticker did move up and down a bit, the performance was extremely shaky.
On November 10, Gold Medal Penny Stocks said that SIRG “looks ready to rebound“. As is often the case, they were wrong. The volumes registered over the next few days were tiny and the ticker remained stuck in the triple-zero levels.
The pumpers are now gone, but the performance has not improved very much. Every once in a while, we see a surge in the trading activity and SIRG sometimes displays impressive jumps. Unfortunately, the long term movement is less than perfect.
Last week, the ticker once again drew investors’ attention. Three positive sessions dug it out of the land of the triple zeros and although it slipped by around 11% on Friday, there are some people who believe that another run in the right direction is now due.
The stock’s volatility means that predicting the future is extremely difficult, but, as you probably know, everything is possible in Pennyland which means that we won’t be too surprised to see SIRG moving up again. It should be noted, however, that the current surge in volume seems to be based squarely on speculation.
The latest press release, for example, was issued more than eleven months ago and it would appear that the company is even struggling to stay current with its financial reports. On April 1, they filed an NT-10-K stating that they expect to publish their 2013 results within the fifteen-day extension period. Forty-one days later, the statement is still not out.
This means that SIRG is on the Pink Limited Information tier and it also means that people are forced to base their investment decisions on information that is now more than seven months old. As if that wasn’t enough, the figures look pretty grim. Here’s what SIRG had at the end of Q3 of 2013:
- cash: $15 thousand
- current assets: $42 thousand
- current liabilities: $15 million
- no revenue
- quarterly net loss: $534 thousand
As you can see, the company doesn’t really look poised to set Wall Street on fire, and the fact that they’ve been around for more than twenty-two years and have managed to register just $1,275 in revenues since inception should speak volumes about how risky a potential investment is.
There are some other problems as well. Between May 2013 and November 2013, SIRG printed more than 287 million new shares. During the third quarter, Asher Enterprises (a well known entity in the penny stock world) received 60 million shares as a conversion of just $38,800 worth of debt (the conversion rate comes in at $0.0006 per share).
There are still plenty of notes waiting to be turned into common stock and, as is often the case, they carry some heavy discounts in their conversion features.
The threat of further dilution is definitely looming and with no press releases or reports to suggest that the company is making progress, SIRG remains a very risky prospect. Treading carefully and doing a lot of due diligence is absolutely crucial.
