Red Giant Entertainment, Inc. (OTC:REDG) Climbs on $500,000 Pump, Hype
Yesterday Red Giant Entertainment, Inc. (OTC:REDG) came out with not one but two press releases. It’s only natural for the hype cauldron to bubble with optimistic news, as the company is currently being targeted by a paid stock pump compensated with $500 thousand.
The pumps first started on February 28 and can largely be regarded as the factor that kickstarted REDG stock into active trading. It would take a very strong believer in cosmic coincidence to think that the stock just happened to shift nearly 79 million shares on the day the paid promotions started, after being virtually dead for months.
It would also have to be a most fortunate coincidence that on the day the $500,000 pump started, the company started methodically shelling out optimistic news releases, after posting press announcements related only to filings for months before.
We previously looked at how Castmor Resources, an unsuccessful mining and exploration venture, turned into REDG, a company working with intellectual property and comics that also happened to execute a forward split of its stock following the name change. In light of one of yesterday’s press releases from REDG, announcing secured financing for a feature movie produced by the company, it bears repeating what REDG‘s financials were as of the date of their most recent financial report, for the quarter ended November 2012:
- $2 thousand in cash
- $29 thousand in liabilities
- $32 thousand in net income
Last time we checked, $2 thousand was at least a few dollars short of a movie production budget. It’s also worth reminding that at the last closing price of REDG, this enterprise had a market capitalization of over $80 million dollars. Following the split in 2012, REDG CEO Benny Powell was the beneficial holder of over 70% of REDG stock. With no active trading before the end of February this year and no public float figure listed on the company’s OTCMarkets page, traders may be able to do the math on their own and figure out who may profit the most from an inflated stock price.
Penny Stock Heroes, a pumper outfit run by an offshore company located in Belize, who are promoting REDG previously touted few other companies but their track record is as ugly as it is short. Their first pump job was Pubcrawl Holdings, Inc. (OTC:PBCW), the infamous pump disaster from late 2012. More recently PSH touted VuMee, Inc. (OTC:VUME) – a stock that is currently 90% down from the spikes of the pump. REDG is the third company the outfit is pumping, with both previous attempts ending in massive investor losses.
Traders are advised to do their own due diligence and never trade on paid pumps popping into their email inbox, especially when the pumps in question are compensated with such exorbitant amounts of cash.