USA Graphite, Inc. (OTC:USGT) Returns, For How Long?
When we announce a stock as gone beyond saving, there is still danger in the dead cat bounce. This is just what USA Graphite, Inc. (OTC:USGT) did on Thursday, adding 11% on significant buying volume. What trend this day in the black will start is hard to tell, but USGT may still do damage and sink investments. 
We warned before such a bounce could easily happen and break the usual steep downtrend that happens after the end of a paid promotion. While the current market cap of USGT has fallen to $21 million from a peak of $100 million, it is still a far cry from the virtually empty developing business that the company runs, relying on the promises of graphite production: 
- $12 cash
- $182,383 current liabilities
- Zero revenues
- $245,171 accumulated loss for 7 years
Seeing this ridiculous amount of cash, it is easy to see why USGT could hardly have made it on its own. Contrary to what graphite producers promise, the US market does not need nationally-sourced graphite, and the mining prospects are poor. So the only way out for USGT and similar companies are to tout their outlook through paid pumps, reach whatever gains they can on the stock market and disappear, like many industry bubbles in the small cap trading area.
In the past, investor experts promised once USGT reached above a dollar, it would “clear the psychological mark” and rise even further. None of this materialized, of course, since most of the interest in the stock came from the specific pumps for USGT and the gold rush for graphite companies.
USGT was touted in a mammoth promotion for $800,000, and among the most prominent pumpers were Wall Street Advisors. The same pumper has a tragic record that beats even the 50% fall for USGT and the general industry drop of more than 40%. Before the USGT selection on December 5th, other tickers made the grade, but quickly lost. Mustang Alliances, Inc. (OTC:MSTG) is an older pump that went up in volume in November, spiked to 8 cents and went on to trade choppily as a penny bet.
Graphite, much like stevia, turned out to be a tool to attract crowds of investors, since all the companies hardly turned out real business profits. So, if you want to return to those industries, do it with caution and a good estimate of acceptable time period and losses.
