The Pump Rages on for Global Entertainment Holdings, Inc. (PINK:GBHL)

Although since the start of Insane Stocks’ promotional effort, Global Entertainment Holdings, Inc. (PINK:GBHL)’s price skyrocketed from the sub-penny field to over $0.10, the pumpers still think that they could squeeze more out of the ticker. Whether they will be able to do it or not, is anyone’s guess, but the more important question is: “Will GBHL be a long-run winner or is it just a temporary play?”.

Looking at their chart from the past few years, we can’t be sure where they will go from here. It resembles the ECG graph of a person suffering from severe arrhythmia – there have been some huge leaps followed by scary downfalls and GBHL‘s price has been raging from less than a cent to over $0.20 per share.

Their latest financial reports don’t give us much hope as well. For one, the latest filings consist of nothing more than the financial statement which, as we mentioned in our previous article, looks terrible. The company profile on the OTC Markets’ website shows that at one point, they were driven into bankruptcy and were forced to reorganize and we also showed you that their corporate office doesn’t look like the proper facility for a soon-to-be extremely huge film-making company.

Nevertheless, the emails keep coming and over the last few trading sessions there have been no serious drops in the price. Still, investing in a company that is reluctant to disclose their business operations in their public reports is risky (putting it mildly). It’s fair to say that we were a bit irritated by the lack of information and the only thing that was left for us to do is to open the annual report for the fiscal 2011 to see if this one will give us some more insight into what GBHL‘s policies are in terms of their shareholders.

Luckily, the 2011 10-K is, indeed, a bit more comprehensive and it did give us the information that we need. Unfortunately, we’re not too happy about what we saw. The first thing that catches the attention is that there are a total of nine notes that were in default as of December 2011. Since there is no current information, the number of past-due debts might have risen considerably since then.

We also saw that during 2010 and 2011 a huge amount of shares of common stock have been issued for all sorts of reasons. We doubt that this made the shareholders too happy and they are probably not pleased with the fact that the current CEO of the company, Mr. Gary Rasmussen is the controlling shareholder. He also owns a number of preferred shares that are convertible at less-than-favorable conditions for the company and its shareholders.

Since we mentioned Mr. Rasmussen, we should let you know what we managed to find about him on the Internet. Most of his biographical reports say that he is extremely good at finding ways to raise capital for small, start-up companies. Looking through the financial statements of GBHL we’re not too sure about that. He also held a major role in a company called, Infinicall Corp. f/k/a FoneFriend, Inc. We searched high and low to see if we will be able to find some current information about this venture, but it would seem that they are no longer publicly traded. And, having in mind that their website is not operational, we reckon that they are out of business altogether. While they were active, though, they filed their reports with the SEC regularly. In one of them we found that they were sued by a former officer for breach of contract among other charges. Since information about GBHL is scarce on the whole, we reckon that this is worth keeping in mind when you are considering the risks of a potential investment.

It’s also worth considering the performance of promoted penny stocks. And since GBHL deal with the production of motion pictures, we decided to include Superior Venture Corp (OTC:SVEN), another small-cap movie making company, as our example of a promotion that ended in disaster. They were pumped by a number of newsletters back in December and while, just like GBHL, SVEN gained some ground, it didn’t last long and they crashed dramatically soon after the emails stopped.