eCrypt Technologies, Inc. (OTCMKTS:ECRY) Explodes Thanks To 5.1 million StockTips Pump
Last Thursday the notorious pumper StockTips announced that their next pump will be for eCrypt Technologies, Inc.(OTCMKTS:ECRY).The email alert with the announcement was sent after the end of the session which meant that its influence would be felt during Friday’s trading. Not surprisingly when the market opened on the next day the stock simply exploded.
ECRY opened with a massive gap up at $0.26, quickly run to a high of the day of $0.385 but fell down and closed at $0.332 for a gain of 150%. The artificial hype created by the pump brought unprecedented levels of interest towards the company. While on Thursday they registered less than 100 thousand traded shares for the entire session on Friday the daily volume was just short of 30 million. In turn the dollar value jumped from $13 thousand to $9.7 million. So what should investors expect now?
On its own ECRY could never support its current market cap of nearly $42 million. The financials of the company are simply atrocious. At the end of September they had:
• $25 868 cash and total current assets!!!
• $31 thousand total assets
• $1.8 million total liabilities
• ZERO revenues
• $164 thousand net loss
Even the contract announced on November 11 seems rather lackluster – ECRY will receive an initial payment of $25 thousand and annual fee of $5015 for a period of 5 years. But an even bigger issue and most likely the reason why the company got pumped in the first place are the millions of extremely cheap shares held by insiders.
Back in their fiscal 2008 eCrypt sold a total of 116 million shares priced at just $0.0005 while in the fiscal 2009 another 17.5 million were sold at $0.008. The latest financial report reveals that more recently around 1.5 million units were sold at just $0.10. With each unit consisting of 1 share and half of warrant, a full warrant has an exercise price of 15 cents, the people who got them still stand to reap some hefty profits at the current market price.
After such a rapid appreciation investors could be tempted to start taking profits. However, the pumps run by StockTips usually last for at least a couple of weeks and the stocks go through a series of drops and subsequent climbs offering opportunities for quick gains. The problem is that after the end of the pump the tickers almost always suffer a massive crash towards the bottom of the chart.
Take StockTips’ last pump for example – Alkame Holdings, Inc. (OTCMKTS:ALKM). The last email alert came on September 29 and since then ALKM have registered only a handful of green sessions. Their stock has dropped from a pump high of 50 cents to 15 cents when the promotion stopped and to its current price of just 6 cents.
Not to mention the risk of a SEC suspension now that ECRY is the target of multy-million promotion. This is exactly what happened with Pingify International Inc (OTCMKTS:PGFY), the company pumped by StockTips before ALKM.
At the moment eCrypt should be approached with extreme caution. and every trade should be exercised only after careful planning.
