Delaine Corp (OTCMKTS:DEPN) Picked Up by the Pumpers Again
Delaine Corp (OTCMKTS:DEPN) did something rather strange on Sunday – they issued a press release. PR activity during the weekends is not something you see every day, especially from OTC companies, but the announcement was peculiar for a couple of more reasons.
First, it discussed the financial results for the fiscal year ended June 30 and once you take a look at the filings, you’ll see that the actual 10-K came out more than a month ago. And second, the press release got published just hours before several promotional outfits started a paid pump for the stock. The total amount splashed out on the campaign amounts to $45,000 and the best paid promoter is Penny Stock Prophet who pocketed a third of the budget. Since there has been no news coming out of the company headquarters for a while, the pumpers also touted the figures recorded during the latest fiscal year.
As a result, DEPN registered an active session yesterday (which, by the way, is something of a rarity). Investors traded nearly $100 thousand worth of shares while the price was given a mind-blowing 160% boost which means that the ticker is currently sitting just under $0.08 per share. The question is: “Did the people who bought yesterday do the right thing by jumping in, or did they get a bit carried away with the hype?”.
Well, while the 10-K isn’t perfect, the figures in it are not that bad. DEPN opened their online used parts store in June 2013 and during the first twelve months alone, they managed to log around $673 thousand in revenues and they even posted a net income of around $95 thousand. That, however, was more than four and a half months ago and the promoters somehow forgot to mention that we have some more up-to-date information which is not that impressive.
DEPN published the 10-Q covering the three months ended September 30 about half an hour before the closing bell on Friday and showed us that during this period, they have stumbled upon some problems. Here are the figures:
- cash: $128 thousand
- current assets: $218 thousand
- current liabilities: $119 thousand
- quarterly revenues: $124 thousand
- quarterly net loss: $53 thousand
The things that draw the attention immediately concern the revenues and the bottom line. Sales have slipped a little when compared to the same period of 2013 and the net income has been turned into a net loss. We don’t know why both DEPN and the pumpers failed to mention these facts, but we reckon that keeping them in mind before making your investment decision is quite important.
Another thing you should consider carefully is, of course, the paid pump. The fact that someone is splashing out money on creating artificial hype around the stock means that someone probably stands to profit from the increased price and liquidity. Once you take a look at the SEC filings, you’ll see that this is indeed the case.
The latest 10-K, for example, tells us that back in January 2013, the company issued a total of 13,000,000 shares for services valued at $65,000 ($0.005 per share). The annual report for the fiscal year ended June 30, 2012 informs us that yet more discounted stock has seen the light of day in the past. Between July 2011 and January 2012, DEPN sold a total of 6,180,000 shares for just $10,300 ($0.00167 per share).
If the people who got the aforementioned stock decide to take advantage of the inflated price and increased interest, things could go awry in an extremely short period of time and we reckon that this is something you should definitely bear in mind while planning your next move.
