The Pump for Nevada Gold Corp. (OTCBB:NVGC) Crashes On Record Sale of Shares

We have been following the pump for Nevada Gold Corp. (OTCBB:NVGC) ever since the first email alerts touting them were sent two weeks ago. The pumpers disclosed that they expect to receive a total compensation of $800 000 and as most high-budget promotions go NVGC started climbing up the chart almost immediately.

In just a little more than a week the ticker was able to double its value running from $0.25 to as high as $0.53 at the end of Thursday’s session. We warned investors that chasing after stocks is almost never a good decision and even more so when the company is being pumped. And we were right because when markets opened on Friday NVGC started plummeting less than an hour into the session. Ultimately the ticker wiped 36% of its value and dropped back down to $0.34 effectively erasing most of the gains it had made. Throughout the day more than 8 million shares got dumped on the market, a number that is 8 times higher than the average for the company.

If you have read some of our previous articles you would have seen that the correction was all but inevitable. NVGC have exactly $14! in total assets according to the latest financial report. And the 28 million shares sold to 34 seed shareholder for just $0.002(after the 8.5-for-1 forward split) should not come as a surprise to anybody who has dealt with pumped companies before.

On Friday NVGC tried to do some damage control by releasing two PR articles. The first declared that the company is aware that a promotional campaign has been pumping their stock but denied any connections with those entities. Still, Wimtak Systems LTD who are the paying party for the pump must expect something in return for their $800 000. The second PR revealed that NVGC is going to carry out a staking program on the Diamond Jim Mine and as a result the mine will be expanded by 60%. This fact however doesn’t mean that the company is getting any closer to production as they have just began the geological mapping and sampling.

Over the weekend Stock Castle continued to sent more touts so the promotion might go on for a while longer. Even if the stock manages to bounce investors should consider that playing a crashed pump is even riskier and the possibility of further corrections should not be dismissed lightly. The $1.1 million pump for Pan Global Corp. (OTCMKTS:PGLO) might have also come to its expected end. The last tout for them was sent last Tuesday, the same day that PGLO crashed by nearly 40%. Since then the stock is hovering around $0.4 per share. On the other hand the stock of Fresh Healthy Vending International, Inc. (OTCBB:VEND) recovered some of its losses and finished the week sitting at $3.25 per share. A hard mailer pumping the company has been circulating among investors with a total disclosed budget amounting to $1.3 million.