BluForest Inc (OTCBB:BLUF) Heading For The $2 Territory Again
After going as low as $1.02 per share during last Friday’s trading session, BluForest Inc (OTCBB:BLUF)’s stock has managed to recover somewhat. The first day of the month ended with gains amounting to 36%. There was some hesitation on Tuesday, but the ticker showed us what it’s really capable of when it managed to shift more than 100 thousand shares in just three and a half hours of trading during July 3’s short session. The percentile movement was not so dramatic, but at 12% gains, it’s not too shabby, either. Shareholders and traders are excited, but they’re probably wondering if the ticker will manage to show a more steady performance in the future.
Let’s look at the fundamentals. BLUF‘s business is rather unconventional for a penny stock. Until about a year ago, they were nothing more than a mineral exploration company called Greenwood Gold Resources and just like many of their counterparts, they were seeking to acquire, develop and explore some properties. Then, for reasons that are not immediately obvious, they decided to change the course completely and entered the business of carbon assets trading.
It’s not such a big industry and a lot of people don’t even know what a carbon asset is. Probably that is why trading has been relatively idle over the last few months and although some paid pumpers tried to do something about it, the results were rather disappointing. There was a campaign for BLUF back on March 5 when the ticker was hovering between $4 and $5 and while the volume remained rather low, there were some violent movements up and down. By the end of March the trend was already set and one month later, the price was just $1 per share.
That’s some heavy losses and it really makes it difficult to trust your money in this particular stock, but somehow, the pumpers, or rather, the third parties, are not willing to quit just yet. On June 18 someone paid PSC Editor $50,000 for a single email and apparently, it was enough to push to ticker to an intraday high of $2.97. The very next session, however, ended with 18% in losses and by June 26 the price stood at just $1.20. This kind of volatility might also put a lot of investors off.
So, what about the business itself? Well, looking at the latest financial statement that covers the first three months of 2013, we can see that it’s not booming. Here are the most important figures:
- cash: $43
- current assets: $17 thousand
- current liabilities: $3.2 million
- revenue since inception: $0
- quarterly net loss: $24 million
- net loss since inception: $303 million (!!!)
That’s some heavy losses and most of them were caused by the issuance of stock for the settlement of debt. You all know that if these shares are let loose on the open market they could wreak havoc with the price. Having in mind the slow progress, this is a very real danger.
Yet, in the interest of fairness, we should point out that despite the zero under the revenue section of the report, BLUF have managed to register at least one sale. It was back in January when Global Resource Energy Inc (OTCMKTS:GBEN) bought 66,000 certified emission reduction credits worth $660,000. GBEN didn’t have the cash to pay for them so BLUF received 3 million restricted shares from Global Energy instead and a quick calculation reveals that they were valued at $0.22 per share. On Wednesday GBEN closed the session at $0.0152 which means that if BLUF were to sell all the stock right now, they will received just $45,600. Of course, it is still restricted which means that even if they want to, BLUF can’t really get rid of their stake at GBEN and by the time the restriction falls, it could be worth even less.
All in all, so far movement around BLUF has been caused by nothing but artificial hype from the paid newsletters, and while currently there’s no mailing activity, some might occur at any time, which could cause dramatic drops such as the ones American Graphite Technologies Inc (OTCBB:AGIN) and Medient Studios Inc (OTCMKTS:MDNT) experienced on Wednesday.
