Black Stallion Oil and Gas Inc (OTCMKTS:BLKG) Still Has Some Juice Left

Yesterday, Black Stallion Oil and Gas Inc (OTCMKTS:BLKG) announced that they have completed the acquisition of the remaining 50% of the Woodrow Prospect in Montana. After receiving a report regarding the reserves of the property, the company came up with a working plan that comprises of four stages, the first of which should be completed before the end of next month.

This definitely sounds like the sort of news that will make quite a lot of people contemplate a potential investment. We know for a fact, however, that despite the optimistic press release, some wouldn’t go even close to the stock.

The people who invested in BLKG a couple of months ago will certainly think twice before throwing any more money at the ticker. They placed their buy orders back then because a certain Chris Porter from an entity called Wall Street Report had made a colorful and optimistic landing page which was accompanied by an unnecessarily long but equally optimistic video.

A lot of people fell for the promises of wealth and fortune and they failed to notice a few major red flags. They didn’t pay attention to the annoyingly fine print at the bottom of the landing page, for example, which told them that Wall Street Report was managing a budget of $150 thousand which was set aside for pumping the stock.

They also didn’t open the latest 10-Q to see what BLKG‘s financial situation looks like. It’s not pretty:

  • cash: $239
  • total assets: $7,331
  • total liabilities: $20,571
  • NO revenues since inception
  • quarterly net loss: $34,671

People failed to notice the fact that Mr. George Drazenovic, BLKG‘s CEO, has some experience with penny stock companies. Unfortunately, it would appear that wherever he goes, he is followed by the nasty promoters. The story of Sun Cal Energy, one of the enterprises Mr. Drazenovic has been involved with in the past is particularly painful. The company in question was traded under the SCEY ticker symbol and in 2007, it fell victim to a rather big pump campaign. The promotion was cut short by an SEC suspension and SCEY was later revoked which eliminated the chances of getting any sort of returns on your investment.

Even if you decide to disregard Mr. Drazenovic’s past, you mustn’t disregard BLKG‘s history. That’s because once you delve deep into it, you’ll see that some people could be holding nearly 20 million shares which were originally acquired for less than $50 thousand.

The investors who failed to notice all these facts and the ones who ignored our warnings got seriously burned when BLKG dropped from almost $2.30 per share all the way to $0.92 in a matter of a little over a month and a half. They are the ones who are probably not that ecstatic about yesterday’s press release.

Others, however, are buying. Thanks to them, BLKG gained 9% yesterday, and they are pushing the stock further up in early trading today. About twenty-five minutes after the opening bell, BLKG is traded at $1.21 per share which is an impressive 12% above yesterday’s close.

These investors are buying both because of the press release, and because of the pump which is still active. In fact, if the disclaimer is to be believed, the budget has miraculously grown over the last few weeks and it now sits at $1 million. The campaign is still pretty effective, but will the astronomical budget make the future stock performance more stable?

It’s up to you to weigh the odds. Don’t forget, however, that all the problems we outlined above still stand.

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