US Energy Initiatives Corp Inc (OTCMKTS:USEI) Gets Promoted Again
On Sunday, Damn Good Penny Picks received $25 thousand and, in exchange, sent out a couple of emails, announcing US Energy Initiatives Corp Inc (OTCMKTS:USEI) as their first pick for 2014. A few smaller promotional outfits like Stock Hideout also jumped in minutes before the start of yesterday’s session and formed the next in a long line of pumps for USEI. Unfortunately, it didn’t go well.
The ticker did manage a brief ascend during the first minutes after the opening bell, but around 11 AM, it all went horribly wrong. By the end of the day, USEI had lost around 23% of its value while shifting a record-breaking 362 million shares.
In the interest of fairness, having gone through the ticker’s extensive promotional history, we’re not that surprised by the disappointing performance. Future promotions and more tears in the eyes of inexperienced investors probably won’t be that much of a shock either, which means that a potential investment should be well thought through. But let’s assume for a moment that USEI will somehow manage to dodge the pumpers in the future. What will happen then?
To find out, we need to go back to June 19, 2013. On that date, the management team announced that they have signed a production agreement with an entity called Promethean Biodiesel according to which, the two companies will work together to maximize the capacity of their production facilities. USEI‘s CEO, Anthony Miller, said that the new contract should secure his company “significant revenue beginning next month“. On August 20, Mr. Miller issued another press release informing us that the ramping-up process is already under way and said that he believes “that U.S. Energy’s revenue should exceed $100,000 in the next 45 days“.
Forty-one days later, the third quarter of 2013 ended and, according to USEI‘s financial report, the three-month period yielded $50 thousand in revenues. It’s safe to say that Mr. Miller’s projections fell a bit short of the mark and we can also note that the rest of the document leaves a lot to be desired. Here’s a quick summary of the most important figures:
- cash: $22 thousand
- current assets: $597 thousand
- current liabilities: $1 million
- quarterly net loss: $39 thousand
We can also see from the report that a total of 85 million new USEI shares saw the light of day during the third quarter and they were issued to satisfy just $42 thousand worth of debt. In case you’re wondering, this brings the conversion price down to $0.0005 per share.
With those things in mind, it’s hardly surprising that yesterday’s corporate update didn’t really affect the stock performance all that much. Of course, there is a chance that this time, the management’s expectation won’t be that far off the mark, but the possibility of further disappointment (and further stock promotions, for that matter) is also there which is why you should be extremely careful when making your final decision.
Another ticker to take a nosedive during yesterday’s session is Tiger Oil and Energy Inc (OTCMKTS:TGRO). It incinerated more than 40% of its value and it seems now that the $2.5 million pump has finally ran its course. The medical marijuana stocks, on the other hand, are riding the wave of excitement created by rumors of more relaxed cannabis laws in New York. Hemp, Inc. (OTMKTS:HEMP), Medical Marijuana Inc (OTCMKTS:MJNA), Tranzbyte Corp (OTCMKTS:ERBB) and Peoplestring Corp (OTCMKTS:PLPE) all registered some impressive gains yesterday. The only question now is: “Will they manage to hang on to the new highs?”.
