Red Giant Entertainment, Inc. (OTC:REDG) Pump Loses Steam
After moving up the charts on two consecutive days, largely carried by a pump campaign, Red Giant Entertainment, Inc. (OTC:REDG) logged a day in the red yesterday, closing 6% down. The $500,000 promo campaign targeting the stock seems to have run out of breath pretty fast.
The first pump emails for REDG came through at the market open on Feb 28, when the stock managed to shift in excess of 78 million shares and close 33% up. Promoters Penny Stock Heroes and Select Penny Stocks disclosed compensation of $500 thousand that they expect to pocked for their advertising efforts.
REDG was formerly Castmor Resources – a venture that didn’t turn profitable and was abandoned in mid-2012 when the company merged with Red Giant Entertainment. Curiously, Red Giant was 100% owned by Mr. Benny Powell before the merger. Powell was also CEO, CFO, chief accountant and president of Castmor, so in practice he merged his two businesses together, with Red Giant Entertainment the surviving entity.
According to REDG‘s 10-K report for the year ended August 31, Mr. Powell held 311 million or 71% of REDG‘s 434,922,000 shares of common stock. The company’s most recent quarterly report lists the same number of outstanding common shares. With no active trading since Powell’s 71% beneficial ownership was declared and volume being generated only as the pump started, traders should be able to figure out on their own who stands to profit wildly from inflating the stock price.
Traders may also want to keep in mind that REDG is an enterprise which holds several comic series properties and which, again as per the same latest 10-Q, generated $32 thousand in quarterly net income but is valued at over $60 million at the last closing price.
Yesterday REDG announced acquiring Comic Genesis LLC, a company previously owned by Chris Crosby – the new addition to REDG‘s board of directors. Comic Genesis dot com is described as a “user generated comics website” – a description that does not exactly scream “revenue streams”.
Promoters Select Penny Stocks first appeared on our tracker touting a pump fiasco that happened late last year, namely Pub Crawl Holdings, Inc. (PINK:PBCW) – a stock that crashed irreversibly after the pumps and is currently 98% down from its late December promo spike.
With pump emails running dry today and the stock logging a day in the red, the promo campaign may turn out to be disappointingly short for the undisclosed party who shelled out $500 thousand to pump REDG.
