Stock Castle Seem Unfazed, Nevada Gold Corp (OTCBB:NVGC)’s Pump Continues
As we mentioned in our previous article, Nevada Gold Corp (OTCBB:NVGC) crashed heavily on Friday when the ticker plummeted to just $0.31 per share during the very first minutes of the session. Probably because of the drop, the management team decided to issue a press release around noon saying that they are aware of the $800 thousand stock promotion and that they have nothing to do with it. NVGC managed to regain some of the lost ground during the following hours but still finished the day around 36% below Thursday’s close. Do the pumpers seem fazed?
Not in the least. Stock Castle continued to send in their touts over the weekend and the message boards are still flooded by people who seem unusually optimistic about the company’s future. That, coupled with the news about the staking program at the Diamond Jim project helped the ticker bounce by 19.4% yesterday finishing the day at $0.40. So, what’s going to happen next?
Well, Stock Castle’s latest alert came in about an hour after yesterday’s closing bell, but, having in mind the $800 thousand budget, we won’t be at all surprised if we see some more touting in the near future (regardless of whether NVGC‘s management team like it or not). The really big problem is, the final result seems all too predictable.
You can have a look at our database and see Stock Castle’s and Wall Street Advisors’ track record which should be pretty indicative of the outcome of the current campaign. Even when you do a bit of research on the entity that is paying for the whole show, Wimtak Systems LTD, you’ll see that it’s virtually non-existent outside the pumpers’ disclaimers, and you’ll also notice that back in January, the same enterprise paid for the promotion on USA Graphite Inc (OTCMKTS:USGT). It’s pretty evident from the chart on the right that quite a lot of money was lost on that particular campaign.
What’s more, we talked about the numerous seed shareholders in possession of some extremely discounted stock that can be unleashed on the open market. Even after the horrific fall from Friday, they still have the chance to cash in on some healthy profits which means that the threat of future painful drops is still very real.
“Still” – you’re thinking – “the pumpers can’t stay with NVGC forever. One day they will have to move on to their next pick. So, what will happen once they do?”
Unfortunately, things don’t look quite so bright on that front either. As we mentioned in our previous coverages, according to the 10-Q covering the period ended August 31, NVGC have no revenues and only $14 in total assets. Even though the announcements from the last couple of weeks sound optimistic, it’s crystal clear that the company simply doesn’t have the money to start any sort of operations.
Looking into the background of the management team doesn’t inspire all that much confidence, either. NVGC‘s CEO, Merrill Moses, for example, is still listed as the principal officer of another penny stock called Armor Electric Inc. (OTCMKTS:ARME) – a company that hasn’t reported with the SEC since 2008 and currently has a market cap of around $325 thousand.
Will the same thing happen to NVGC? Time will tell, but one thing is certain: the company is in a deep financial mess and if they don’t manage to get themselves out of it quickly, they could be in for some more trouble.
This adds another layer of risk on top of the dangers associated with the $800 thousand stock promotion. Make sure you do a lot of due diligence and tread carefully around NVGC.