Western Graphite, Inc. (OTCBB:WSGP) Pump Crash Imminent

Western Graphite, Inc. (OTCBB:WSGP) can crash very soon, and destroy the investments of careless investors. The company should be filing its quarterly in the coming days, and things may get ugly.

Since it started trading in April, WSGP has gone up about 300%. Yesterday it closed up 7.39% at $1.89 on nearly 2 million shares. At this price the market cap of WSGP is around $110 million.

What’s wrong with that number is the fact, that so far, WSGP hasn’t proven it has anything worth that much. Actually, the company’s filings show that WSGP had $73 in cash and $3,937 in deposits as of Dec. 31, 2012. Since the company hasn’t announced any financing, we can assume those numbers are still correct or they are lower.

As for the properties WSGP has, there is no indication whether they are worth anything, except that their previous owners parted with them for shares of WSGP. The quarterly report should shed some more light at the situation at WSGP.

Until then, traders and potential investors should consider the facts around the way WSGP has been set up. It used to be a shell doing nothing for years. Around February 2007 the company sold 3 million shares to unnamed parties for $0.02 per share.

Pretty much nothing happened until February this year when the company announced it would merge with a subsidiary to change its name and effect a forward 10 for 1 split. This way the unnamed parties mentioned above got their shares to 30 million, and those are freely tradable shares effectively acquired at $0.002 per share.

Last but not least, the paid pumps, tout reports and the hype created by the company’s own press releases should give traders an idea of what WSGP really is and where it’s going. If that wasn’t clear enough – it’s a pump job.