Great Rock Dev Corp (PINK:GROC) Are All But Done For

As you can see from the chart on the right, until a couple of days ago, Great Rock Dev Corp (PINK:GROC) was showing quite a steady performance – not a lot of volume, but a price that, seemed to be unwilling to move up or down. Their latest financial statement might have had something to do with all this since, as we mentioned, the annual report for 2012 showed that they have generated some profit. We also noted that you shouldn’t get too excited about it since the net income amounts to no more than $14 thousand for the full twelve months and it was generated by a business that is no longer active. Still, it is a rare sight when it comes to small cap companies which means that the sun was shining and the long terms shareholders were hoping that GROC will find some gold which would have meant that the profits would skyrocket. Then came the pumpers.

There were many of them and they were well prepared and well paid. A total of 43 emails arrived in our inbox and we estimated that the compensation for them amounts to more than $300 thousand.

So, what’s the score? Well, let’s say that the aforementioned long term shareholder who were dreaming of gold and profits didn’t know what hit them. The first day of the pump, April 22, resulted in a trading volume amounting to 4 million shares and a 37% drop in the price with few opportunities for a profit. You might be thinking that this was bad enough but it was nothing compared to the second day – April 23.

And that took us by surprise as well since, as we mentioned yesterday, the newsletters were a lot quieter before the trading session and it really looked like the whole fiasco was over. But it wasn’t – eight hours of trading resulted in more than 11 million GROC shares changing hands and a whopping 64 % loss compared to April 22’s close.

All in all, the massive pumping effort resulted in GROC‘s shares being more than 80% cheaper now than they were before the whole thing started. We have to admit that, although we deal with these sort of practices on a daily basis, we weren’t expecting that big of a crash. The ones who were probably most startled, however, were the investors who thought that they knew what they’re doing, and hoped that the combination of newsletters and press releases will give the ticker a push resulting in a day trade and a quick profit.

Unfortunately, GROC was moving up only during the first couple of minutes of April 22’s session which means that the potential for a happy ending was virtually non-existent.

While, at first glance, it looked like this will be just an ordinary pump, it caused quite a stir and it lead to an individual by the name of George Sharp threatening to file a lawsuit against GROC for fraudulent schemes. We’re sure that the proceedings around GROC will be quite interesting from now on and we will be keeping an eye on them, but in the meantime, apparently some people haven’t given up.

While we can not confirm it with absolutely certainty, we can read in some of the investor message boards that there are SPAM emails touting GROC right now. There are also people on the same message boards that seem to be suspiciously optimistic considering what has happened so far.

In any case, whether the alerts are coming from a paid newsletter, an unfamiliar email address, or a fellow trader, you should always be sure to perform a thorough research and weigh the risks carefully before investing in penny stocks. We did that with GROC and we found some quite interesting facts like, for example, the fact that they share their office as well as their CTO with two other penny stock companies, the fact that they have left behind a profitable business so that they can purchase some unproven gold properties and issue quite a lot of shares for them. If you are still thinking of investing in GROC‘s shares, we would suggest that you have a quick look through our findings and, of course, make sure that the necessary due diligence is performed.