Lithium Exploration Group Inc (OTCMKTS:LEXG) Remains Hesitant Despite Optimistic News

99LEXG.pngThere’s no doubt that Lithium Exploration Group Inc (OTCMKTS:LEXG) is one of the more controversial companies out there. The stock received some extensive promotional coverage in 2011 and quite a lot of people lost a major part of their investments.

Some bloggers around the internet wrote negative articles aimed directly at the company and its CEO, Alex Walsh. The checkered past meant that, just over a month ago, virtually no one showed any interest in the ticker. Volumes were nothing special and although the price showed some movement, it was mostly heading for the bottom of the charts.

The beginning of March, however, brought some renewed interest. The first session of the month ended with over 200% in daily gains and a dollar volume of nearly $3.6 million. Three days of selling followed, but despite the pressure, LEXG managed to avoid dropping below the $0.10 barrier. On Friday, it shifted nearly $1.2 million worth of shares and bounced a little, closing the week just below $0.11. Today’s trading seems to be quite turbulent as well. LEXG opened the day at $0.1305 (nearly 20% above Friday’s value), but right now, an hour and a half after the opening bell, it’s barely managing to stay in the green.

So, what is the reason for all the commotion?

Oddly enough, it all started with Tesla Motors Inc (NASDAQ:TSLA) who announced their plans to build the world’s biggest lithium-ion battery factory. Investors thought that this is a major opportunity for LEXG and it would appear that Alex Walsh shared their opinion. This, along with the news about the satisfaction of a $1.688 million debenture, helped LEXG log 207% in daily gains on March 3.

A few days later, they announced the acquisition of a 50% interest in a company called Tero Oilfield Services Ltd and on March 7, Mr. Walsh said that he believes that the revenues coming towards LEXG will exceed expectations.

Yet another press release hit the wire earlier today. Apparently, the Sonic Cavitation Ultrasonic Generator has been tested in Texas and the results seem to be good. After three and a half hours of constant work, the machine has shown no signs of technical problems.

All in all, the stream of news is consistent and all the announcements appear mightily positive. Despite this, the stock performance is less than impressive.

This can be partly attributed to the paid promotion that seems to be running for LEXG at the moment. So far, we have received only a single email (worth $50 thousand) from Stand Out Stocks, but we can see that some paid advertisement pop-up windows appear on websites like Investor’s Hub.

We’ve already seen the ticker perform under the pressure of paid pumps and it’s fair to say that the results have been ENRT.pngabsolutely devastating. That’s why, despite the torrent of optimistic PR’s, treading carefully and considering all the risks might not be a bad call.

LEXG wasn’t the only ticker to log some positive results at the end of last week. Enertopia Corp (OTCMKTS:ENRT) also climbed by around 8% while shifting more than $985 thousand worth of shares. Well Power Inc (OTCBB:WPWR), however, wasn’t so lucky. It caved in under the promotional pressure and dropped by around 17%.

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