Hard Mailer Pump Helps EMS Find Inc (OTCMKTS:EMSF) Blast Through $2
In early trading yesterday the stock of EMS Find Inc (OTCMKTS:EMSF) couldn’t stop its slide an quickly sunk to a low of $1.50. However,not only was the ticker able to recover but by the time of the closing bell it had managed to add over 17% closing at $2.12 per share. With this latest gain EMSF’s market cap sits at more than $60 million.
How realistic is such a valuation though? EMSF was created through a merger just a couple of months ago and although the financials of one of the entities, EMS Factory Inc, are expected to be revealed in an 8-K filing by mid-June we can take a look at the results of the other company – Lightcollar, Inc. Their latest financial report covers the quarter ending December 31 and contains the following numbers:
• ZERO assets
• $90 thousand liabilities
• ZERO revenues
• $11 thousand net loss
The financials are truly atrocious but the red flags don’t stop there. If you open the annual report for the previous fiscal year you will learn that back in 2011 and 2012 Lightcollar issued 3,650,000 shares for just $36,500 in proceeds. With the help of the 1-for-5 forward split performed in December those shares turned into over 18 million with a split-adjust price of $0.002.
So let’s recap – there are millions of free trading underpriced shares issued in the past, a forward split effected six months ago and the current company was formed through a merger. If you have any experience with pennystocks you should already know what all of this usually leads to – a paid pump.
And indeed a landing page dedicated to hyping up EMSF has been set up and according to the disclaimer the sum of $80 thousand has been splashed on the pump. Investors have also began receiving hard mailer brochures which could mean that the production budget for the pump is far bigger.
It seems that for now the artificial hype generated by the promotion is enough to push the stock higher up the chart. Do not forget however that during yesterday’s trading EMSF climbed to an intraday high of $2.53 just to wipe all of the gains in a matter of minutes.
Playing pumped stocks is extremely dangerous. If you time your trades right there certainly are opportunities for some quick gains but if you miss the right moment to shed your holdings the losses could be devastating.