AEGEA Inc (OTCBB:AEGA) Gets a $750K Pump
On August 26, AEGEA Inc (OTCBB:AEGA) informed us that the acquisition of a public company called Forever Valuable Collectibles, Inc. has been completed and that AEGEA’s stock is now traded on the OTC Markets. Things weren’t off to the best of starts.
As you can see from the chart on the right, the price fluctuated violently and refused to show any sort of consistency while the dismal trading volumes suggested that people weren’t really paying attention. The optimistic press releases that AEGA issued during the following weeks didn’t really help all that much and even the email alerts sent by Blue Horseshoe Stocks weren’t enough to push the ticker further up the charts.
On Friday, however, AEGA registered its first truly active trading session when 182 thousand shares changed hands pushing the dollar volume to nearly $500 thousand. The price also surged by about 10% and the ticker closed the day at $2.50 per share. So, people are now paying attention to AEGA and are probably expecting some more movement in the right direction. Surely, there must be a reason for this.
Of course there is. After some digging around we found a website called Stock Alert Reports (SAR) which contains a massively optimistic report on AEGA. According to the About Us page, SAR’s aim is to bring you investment options “that are poised to explode” and ones that could make you “incredibly rich“. It almost sounds too good to be true, doesn’t it? That’s probably because it is. The fine print under the forward-looking report states that the people behind SAR are managing a total promotional budget of $750 thousand that has been provided by an entity called NGS Ventures Inc.
This makes SAR’s price targets (more than $6 per share in the short term and $11.38 in the longer run) more far-fetched than ever, but we still decided to see if a prolonged movement in the right direction is even remotely plausible.
Let’s start with the basics. As we mentioned in our first paragraph, a merger was recently completed which in turn led to a change in the business plan. Prior to the acquisition, the publicly traded company was engaged in the reselling of sports memorabilia while right now, they are planning on creating a mega-resort community in South Florida that will, they say, become an international leisure destination. Quite a jump, you would agree and one that will require some colossal investments. Do they have the money?
The latest 10-Q covers the period ended June 30, which means that it doesn’t include the new subsidiary’s balance sheet but fortunately, they were kind enough to post the Q2 financial results of the now publicly traded AEGEA in an 8-K form dated September 6. Here’s how they’ve been getting on:
- total assets: $54 thousand
- total liabilities: $443 thousand
- no revenue
- quarterly net loss: $112 thousand
You would agree that the figures above aren’t really in line with the absolutely staggering $287 million market cap and although they’ve been talking about an intricate foreign investment program, we still reckon that it’s way too early (at best) to compare them to entertainment giants like Six Flags Entertainment Corp (NYSE:SIX) and The Walt Disney Company (NYSE:DIS) (which is what SAR are doing in their report).
A more immediate worry, of course, is the ongoing promotion. Someone has invested $750 thousand in the hope of artificially inflating AEGA‘s price and the people who did it will want to get some (if not all) of their money back. Another penny stock that went through the same treatment (with the same budget) is Virtual Sourcing, Inc. (OTCMKTS:PGCX) and you can see from the chart on the right just how badly it all ended up. Make sure you do your own extensive research and risk assessment before you jump in.
