The Promotional Budget For North American Oil & Gas Corp (OTCBB:NAMG) Grows

If you check out our article on North American Oil & Gas Corp (OTCBB:NAMG) from yesterday, you will see that the ticker has been put under quite a lot of promotional pressure during the last couple of weeks. A large number of newsletters touted the stock through dozens of emails and a special landing page was set up for getting investors excited.

With so much effort in mind, you’re probably expecting the total budget to be substantial and it is. The disclaimer on the landing page written by Mr. Tobin Smith says that the total amount of money paid for the dissemination of optimism and bright promises is $340 thousand. Or is it?

Well, it was yesterday. When we checked the page today to see if anything has changed (we knew that it was unlikely, but we had to give it a go), however, we saw that it had grown quite a bit overnight. Right now, the fine print under Mr. Tobin Smith’s rather far-fetched claims discloses a total promotional budget of around $939 thousand.

That’s quite a lot of money for a pump and we’re sure that if the third party were to give the sum to NAMG themselves, the shareholders would have been much happier. As we mentioned yesterday, the company itself has no more than $113 thousand in the bank and we’re not sure if this much cash will be enough for them to really make an impact on the oil and gas industry.

Unfortunately for the shareholders, the third parties decided to give the money to the pumpers instead, and having in mind the rather big promotional budget, you are probably expecting some sort of steady growth (at least in the short term).

Sadly, NAMG‘s behavior wasn’t as consistent as it should have been. Touting began around the first half of July and the volumes show that the raised awareness had an immediate effect on trading. The price did jump from around $0.74 per share all the way to $1.07 but it didn’t remain there for too long and by July 26 it was back where it started. What happened after that, however, is quite astonishing.

Yesterday NAMG closed the day at $1.29 which is around 10% above its previous value and that marked the sixth green session in a row for the ticker. This sort of performance is rarely observed even when speaking about larger companies, but the question on everyone’s mind right now is: “How long will the whole thing last?”. Well, we’re about to find out, but we still have our doubts as to their long-term growth.

For one, NAMG is a company that doesn’t have much in terms of assets, has quite a lot of liabilities and while the press releases do sound extremely optimistic we have yet to see any sort of predictions or deadlines for the start of the revenue generation.

Another thing that definitely worries us of course, is the ongoing pump. As we mentioned, $939 thousand is quite a lot of money and the people who paid for the campaign will probably want to get their investments back. If that happens, quite a lot of retail investors will be left holding the proverbial bag, wondering what might have been.

Why are we so sure? Well, take the people who are trying to push the price up, for example. As we mentioned, former Fox Commentator, Mr. Tobin Smith, is mightily optimistic about NAMG and he has even set a price target of $5 per share. He thought that the future is similarly bright for Petrosonic Energy Inc (OTCMKTS:PSON) a couple of months ago, but instead of reaching for the skies, PSON is currently at around $0.70 while Mr. Smith no longer works for Fox. This article will give you the reasons for this.

The fact that the budget seems to be growing might suggest that touting will continue for some more time, but that is by no means a guarantee that the stock performance will remain as good as it has been for the last couple of days. In fact, the increasing amount of money being spent on promoting the stock makes sudden and violent corrections (similar to the ones displayed by Sanborn Resources Ltd (OTCBB:SANB) and Dephasium Corp (OTCMKTS:DPHS) yesterday) even more probable. Make sure you have this in mind before making any decisions that might prove costly.