UMAX Group Corp (OTCMKTS:UMAX) Crashes On Record Volume

To say that UMAX Group Corp (OTCMKTS:UMAX) has been flying under the radars of most investors would be an understatement. The company rarely sees sessions of intense trading not to mention that last week it once again sunk into the triple zero prices.

This Tuesday, however, UMAX exploded up the chart gaining nearly 100% and closing at $0.00179. The volume for the session of 6.8 million shares was several times higher than the monthly average. Quite a lot of investors seem to have gotten extremely excited but as always doing even cursory due diligence is enough to reveal the plethora of extremely serious red flags that surround UMAX.

Let’s start with the fact that Tuesday’s enthusiastic trading was not sparked by a new announcement or filing issued by the company. Instead it was all due to a new wave of pump emails that targeted the stock. Early in the session Stock Mister, 1-2-3 Stock Alerts and Penny Stock Circle began hyping up UMAX. Of course they didn’t do it for free disclosing a $10 compensation for their services. In the evening another round of emails was sent flying – this time by the affiliates of Damn Good Penny Picks. They bagged a $14 thousand compensation and stated that UMAX “could DOUBLE or MORE on Wednesday”.

We often encourage you to be suspicious towards anything said by the various pump outfits operating in the world of pennystocks and what happened to UMAX is exactly the reason why. Instead of moving up the chart as the newsletters said the stock got clobbered into the ground and wiped over 32% of its value. Even more scary was the fact that during the session the unprecedented amount of more than 107 million shares got dumped on the market. Despite the severe crash UMAX still closed at $0.0012. Will they be able to maintain even that price though?

There is no current information about the financial state of the company because UMAX have not filed a single quarterly report for their current fiscal year. The latest information is contained in the annual report for the fiscal year ended April 30, 2015, and according to it back then UMAX had total current assets of $1081 and total assets of $8081. Between June 30 and September 22 the outstanding shares of the company were diluted severely and from 167 million they ballooned to more than 518 million. The authorized shares were also increased drastically – from 200 million to 1.85 BILLION. Currently UMAX will be trying to raise $2 million through the sale of its Preferred B shares .

It should be obvious that trading UMAX is a quite risky. The stock requires thorough research before any money is put on the line.