Beware, PacWestEquities, Inc. (PINK:PWEI) Strikes Again

What do you do when a ticker refuses to retreat to a safe distance? PacWestEquities, Inc. (OTC:PWEI) is back on the radar, with a daily jump of 5.5% and strengthening volumes in the past few days. At 28 cents per share, it held its positions for months, much longer than we expected. PWEI0211.png

The ticker comes with the standard warnings from the past, when it was pumped despite the company’s lack of resources. With more than 1.4 billion shares outstanding and a float of around 400 million shares, PWEI is threatened at any time by potential selling from large holders and possibly insider stock owners. Otherwise, the company’s financial situation remains pessimistic: PBCW0211.png

  • Zero cash
  • $25, 922 liabilities
  • No revenues
  • 500 million common stock and 250 million preferred stock authorized, pre-split

But perhaps the renewed interest is due to the company’s attempt to add new business promises to its portfolio. It is a wonder how a cashless company can arrange the acquisition of a solar technology subsidiary. On Friday, PWEI announced it is close to acquiring the Solar Technology Line of DayStar Technologies, Inc. There is still no announcement how this deal will be financed.

Supposedly, the solar panels may combine in some way with the company’s systems for growing feed. But the past and current mania around the PWEI ticker is certainly not due to doing business. At the end of last year, PWEI occupied a higher tier, hovering over 65 cents for a few days before losing half its value. This is not unusual for a stock promoted in a campaign with the $500,000 budget, and losses could have been higher. But the long campaign for PWEI kept up the interest enough and in 2013 called investors back. More than 5 million shares were purchased at the end of last week.

The company is also not registered with the SEC, and relies on alternative reporting standards. This severely limits investors who may wish to discover the strength of the underlying business. Just as the upcoming acquisition, we have no way of knowing how PWEI financed the $15 million acquisition of hydroponics company PurGroElectronics.

To be honest, PWEI jumped much higher than expected, shooting up 1700% in the Preferred Penny Stocks pump. But this success belongs to the professional pumper who managed to gain enough attention and push the ticker of a worthless company. Other picks from Preferred Penny Stocks did not get a second chance. A previous pick, PubCrawl Holdings, Inc. (OTC:PBCW), was promoted on December 5th, but lost its positions much faster than PWEI, ending up more than 95% lower than the promotional peak.

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