W&E Source Corp (OTCMKTS:WESC) Woken Up by Stock Mister
W&E Source Corp (OTCMKTS:WESC) started off a while ago and at the beginning, they wanted to create a media outlet dedicated to the Chinese stock market. Things didn’t quite work out.
The latest 10-Q tells us that due to some software problems, they were forced to re-evaluate their business plan. At the end of 2011, they decided that the tourism industry is the way to go and began providing ticket and hotel reservations, travel and conference arrangements, as well as a host of other services. Some new people took the helm and a few subsidiaries were established.
Unfortunately, progress has been excruciatingly slow. On February 14, WESC filed their financial report for the forth calendar quarter of 2013 and it shows that back on December 31, the company had:
- cash: $23 thousand
- current assets: $34 thousand
- current liabilities: $139 thousand
- quarterly revenue: $4,812
- quarterly net loss: $64 thousand
It’s clear that although there are some revenues and although there is a tiny (less than 5%) increase year over year, the company is nowhere near ready to become an industry leader. Because of this, WESC hasn’t really been the hottest ticker in Pennyland. In fact, if you take a look at the historical records, you’ll see that trading was virtually non-existent… until yesterday.
More than 9 million shares changed hands in a single session racking up a dollar volume of over $2.2 million. WESC opened the day at $0.02, but started climbing rapidly. Around 12PM, it hit an all time high of nearly $0.44 after which it settled to more manageable levels. Eventually, WESC closed the session at $0.19 per share which is 850% above its previous value.
That’s a truly astonishing performance displayed by a stock that was all but dead a couple of days ago, but an interesting question props up: “What’s the reason for the sudden and violent jump?“.
It would appear that the whole thing was caused by a Stock Mister pump. The alert came through shortly after the opening bell, it disclosed no compensation, and, as you can see, it set the market on fire. There are investors who seem quite happy with the movement and report on message boards that a few well-timed trades have resulted in some healthy profits. There might be, however, others who perceive WESC as a long-term investment. They might want to think twice.
With less than $5 thousand in quarterly revenues and with a $9.1 million market cap, a drop in the share price seems all but inevitable. Of course, the ticker might just be able to hold on to some respectable levels, but this will make virtually no difference if the volumes disappear.
United States Basketball League Inc (OTCBB:USBL), for example, was also pumped by Stock Mister not that long ago and back then, the free alert resulted in an explosive session similar to the one registered by WESC. USBL‘s current value stands at $0.88 per share which is pretty close to the pump-induced levels, but the $16 thousand dollar volume registered yesterday suggests that people who are willing to get out now might be having some problems doing it.
That’s why, thinking through every single move carefully and considering the risks is absolutely essential.
