UPDATE 2: As PennyStocking Silver subscribers and TIMalert subscribers know I NAILED WLOCD as the next stock to drop 50%+ in one day…predicted with this report 10 days before the big drop happened so everyone had plentyyyyy of time to prepare and get short…EXACTLY like NXTH HHWW EMGE AENY MSEH SPNG CPOW CPMCF GRYO on and on and on and on did…except this time I actually timed my short well and banked over $30,000 in profits on just a $60,000 position in one day…see the trade and get excited for the upcoming blog post detailing it all with full lessons because as you can see only one of my other students really banked like I did and considering I have 1,000+ subscribers of my 4 newsletters, that’s not acceptable to me as a teacher…I expect more out of all you and I think the solution is I really promote my DVDs more since this exact pattern is explained at length in PennyStocking Part Deux, TIMraw, TIMtactics, TIMfundamentals Part Deux and my new Vegas seminar DVD package “The New Rules Of PennyStocking”…you gotta study them!
UPDATE: I have just shorted some shares around 60 and 58 cents/share, this could drop 30-40-50% int he enxt few days just like every other paid pump when it cracks
PennyStocking Silver subscribers and TIMalert subscribers know I LOVE busting paid penny stock pumps, but I enjoy shorting them and profiting from their gross existence even more. But since this newsletter will be focused more on the longterm and some will involve illiquid stocks, I won’t take positions until 24 hours AFTER my initial research report and sometimes no position at all so you subscribers come first.
This latest roughly $200 million company, or to be exact as of last week’s closing price, $193 million company fully admits to being a carcass of a company in their SEC filings. Since it’s a paid pump, we can ignore every single press release and “newsletter research reports” since those are all conflicted and misinformation and focus squarely on the ugly SEC filing documents where the truth usually lies.
Understand there’s plenty of self-admitted carcasses out there, but most aren’t the subject of promotional email after promotional email campaign nor have they risen over 1,000% in the past few weeks specifically due to this paid-for campaign.
The stock is WLOCD, which at 72 cents/share now just did a nifty 4-1 split to frustrate short sellers and in an investor psychology sense erase their massive email-fueled gains to a f0ormer high to make the stock price look attractive again.
My subscribers know I’ve long been following this stock for a potential short, but only now has it reached levels where it will soon become a great short. That’s right, I’m not saying this is a perfect short right now, this research report is meant to prepare you for the inevitable catastrophic 50-99% collapse that will happen in the coming days, most likely by early February.
When it collapses some random day – just as all of these paid pumps like CPOW GRYO CPMCF and more similar to this orchestrated runup FCCN FCPG NXTH HHWW AENY and MSEH – short sellers and my research straight from the company’s own SEC filings will not be to blame.
After all, for what are investors valuing this company at $193 millions? Is it the allure of their Regus rented office for which they pay a staggering (sarcastic) $249 per month in rent?
Are investors valuing this company based on the CEO’s extraordinary work ethic (sarcasm) which the same SEC filing admits he “devotes approximately 15-20 hours a week of his time to our operations.”…which wouldn’t be that bad if other employees picked up the slack except the next sentence in the same SEC filing that no investor reads states “We currently have no other employees, other than Mr. Fields.”
Perhaps the current $193 million valuation is due to the ZERO cash in the bank from just a few months ago (they’ve since allegedly raised a few hundred grand):
As at August 31, 2010, the Company’s cash balance was $0 compared to $330 as at August 31, 2009 and its total assets were $0 compared with $330 as at August 31, 2009. The decrease in total assets is attributed to bank charges and accounting fees.
Or the truly evil $66,666 in liabilities the company cannot afford to pay off:
As at August 31, 2010, the Company had total liabilities of $66,666 compared with total liabilities of $8,130 as at August 31, 2009. The increase in total liabilities was attributed to increases in accounts payable and accrued liabilities of $39,901as the Company did not have sufficient cash flow to settle obligations.
Should I keep going? Do I really need to include the auditor’s report that says:
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.
Or should I get into the complex shares outstanding question that starts with this transaction:
Between January 16, 2007 and August 31, 2007 the company received one subscription from the company’s sole officer and director totaling a cash proceeds of $5,000 and the issuance of 105,000,000 common shares.
…which for those of you counting at home would now be 420,000,000 shares except for the fact that there was allegedly a 21-1 split which reduced those 105 million presidential shares and the approximate 60 million other shares to just under 8 millions hares as the bland but illuminating SEC filing states:
On February 23, 2010 the Company completed a 21-1 forward split of the company’s issued and outstanding common shares, bringing the total of issued common shares to 165,199,986 from 7,866,666.
Which frankly is very confusing considering their last SEC filing says:
On October 22, 2010 the Company retired a total of 100,000,000 common restricted shares owned by the Company’s former president.
How do you retire 100,000,000 shares 8 months after you supposedly reduced those shares in a 21-1 split?
To make it even more confusing:
As of December 9, 2010, an aggregate of 67,199,986 shares of our common stock were issued and outstanding and were held by approximately 28 holders of record, based on information provided by our transfer agent.
How in the world did we go from 165 million shares to 8 roughly million shares then retire 100 million shares and end up with 67 million shares…which are now 268 million shares given the 4-1 split that we did witness happen (at least the stock price got divided by 4!)
I haven’t seen such shares outstanding games since SpongeTech Delivery Systems Inc. (SPNG) and that one also had tons of paid promoters and a similar kind of 1,000% runup due to mailers….turns out that company allegedly falsified 99% of their sales and their management is on trial for all sorts of nasty stuff, among other things, making up a fictitious lawyer.
Is WLOCD the next SpongeTech? Hard to say at this point, but the evidence above is very questionable and I know for a fact this company does not deserve a $193 million valuation let alone a $1 million valuation.
The good news for longs and those of us who want it spike more (gives it greater potential downside) is that their SEC filings, if we are to trust them, say there were only 28 shareholders as of last month so it’s unclear where the selling pressure will come from.
Perhaps the 5 million shares that weren’t allegedly retired from the former president? Perhaps an SEC halt given the numerous questions, especially the ones regarding basic mathematics and the “retirement” of 100 million shares reminds me of that former paid pump BGBR where a Vancouver nightclub bouncer gave away 30 million shares…before that stock crashed 99%.
…anyway, I’ll be looking every day for signs of fading as when this cracks, it could crack big…50% or more in one day…bigtime potential short, but finding shares to short of something this questionable will be difficult so be prepared every morning to hunt for shares….my longterm target price is 10 cents/share.
PS There is one other guy allegedly involved with this company, Larry Eastland, who has a long history of working with US presidents…nothing recent but decades ago so I figure he’s the same age as some fossils you see in museums. Normally somebody with presidential credibility would be a positive except that good ole’ ole’ ole’ has a questionable past of his own, check out this document
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