VelaTel Global Communications, Inc. (PINK:VELA) Pumped by Research Driven Investor
In Friday’s trading VelaTel Global Communications, Inc. (PINK:VELA) closed 61% up at $0.20 per share. A month ago the company was trading below $0.04 a share. The movement, as it often happens with OTC stocks, was caused by a paid pump.
Research Driven Investor (RDI) was one of the promoters who touted VELA in their emails. RDI did not start sending out their ‘hot pick’ emails before pocketing their $50 thousand in compensation. The pumpers then went to compare VELA with companies such as Verizon and AT&T – businesses worth hundreds of billions of dollars each that just happen to work in the same sector. VELA on the other hand is worth about $15 million at the current price.
What did the aspiring telecom company have as of their latest report for the quarter ended September 2012? Little that could inspire investor confidence. Here is a quick rundown:
- $280 thousand in cash
- $26 million in current liabilities
- $2.1 million revenue up to Q3 of 2012
- $9.4 million net loss up to Q3 of 2012
The company’s revenue is completely obliterated by operating expenses, adding sizable quarterly chunks of additional debt to a company that’s already neck-deep in it.
The pumper also touted a recent development in China, where VELA launched a new subsidiary company. However, all the information in the press release is, as usual, in the future tense and hinges on what may and what might happen and not on actual performance. For those who love technical details, despite them being irrelevant with promoted penny stocks, VELA is heavily into overbought territory. In addition to that, in late November various VELA officers acquired over 10 million shares at about $0.03 apiece. If they decide to dump at the current price, they’d be bagging sevenfold profit.
Pumpers Research Driven Investor previously promoted failing enterprises such as Wikifamilies, Inc. (PINK:WFAM) – a company that crashed from its pump highs of $0.40 and is now barely trading at $0.01. RDI even went on to send a further email to their subscribers, telling them the intra-day dip of VELA was nothing to worry about and that if they give this one ‘some time’, they may see huge profits. However, considering the performance of previous picks of RDI, it’s a lot more likely that traders will be looking at huge loss.
Investors are advised to do their own research and be extra careful with all stocks, especially with OTC pennies that are the subject of ongoing paid pumps.
