Discovery Minerals Ltd. (OTCMKTS:DSCR) Picked Up for a Short Ride on Corporate Updates
Discovery Minerals Ltd. (OTCMKTS:DSCR) is the typical story of a high-flying stock that fell from grace after its promotional time, and went as low as triple-zero positions, before returning for some reason in the new year. DSCR rounded off $0.001 after growing by 25% on dollar volumes above $456,000.
DSCR started revving up its game with updates and PR starting in December last year. Until then, the company was a metal miner that went through a merger with a real estate company, thus in fact becoming a vehicle for OTC trading. Strictly speaking, DSCR is not mining but trading in potentially lucrative mineral rights. Unfortunately, the pink sheet is not a regular filer, and its latest audited financial results are seven years old.
The self-published OTC page financials are not so encouraging:
- No revenues
- $602,000 net loss for 2013
- $15,000 cash-like assets
- $656,000 total current liabilities
What is even worse is that DSCR is one of the newly active tickers with a horrible share structure. DSCR has over 1.9 billion shares outstanding, a further almost two billion shares authorized. Recently, Mr. Russell Smith, the company’s CEO, returned to treasury a billion shares issued previously to him. As it is easily seen, DSCR is trigger-happy about dilutions, and so any higher price is easily wiped out by selling.
There is little to say about DSCR except that investors’ forums see this ticker as a short-term selection with some potential for fast gains due to the low price. Surprisingly, DSCR so far has not managed to style itself a cannabis company, by now an almost sure-fire recipe to launch underpriced tickers.
Other similar stories end in carnage. Strategic Global Ventures, Inc. (OTCMKTS:STBV) also moved in to the penny range, only to lose and slide back to a tenth of the price, at $0.0017.
For now, Intelligent Living, Inc. (OTCMKTS:ILIV) has taken a more stable position at $0.012, but it has to show more promise in developing medical cannabis products based on its health and wellness business model.
If you still like DSCR for its potential, realize that for stocks this deeply underpriced, the gains are very short-lived, so it is best to choose the time frame well. Forums predict- or at least would love to see- a growth of 1000%, and this is not so unusual among sub-penny stocks. Still, the setbacks are just as deep, going as far down as 95%. We will be tracking DSCR in the new short week, but so far, there are enough indications of risk to warrant caution.