Tobin Smith Pumps Gray Fox Petroleum Corp (OTCBB:GFOX)
Gray Fox Petroleum Corp (OTCBB:GFOX)’s stock has been actively traded under the new ticker symbol for just over a week, but it’s already starting to attract some attention. The performance is somewhat shaky but it would appear that the interest, though not explosive, is relatively high. On Wednesday, for example, the ticker managed to shift more than 166 thousand shares bringing the dollar volume to around $177 thousand. The price went up by 10% and is currently standing at $1.06. But does the company really deserve this valuation?
We’re not so sure. Up until a couple of months ago, GFOX went under the name “Viatech Corp” and it was trying to come up with a 3D rendering system for architectural visualization. This plan never really worked and so, at the beginning of June, the management team was changed, the new name and ticker symbol were put in place, the stock was split, and GFOX became and oil and gas exploration company.
Apparently, some leases were negotiated a month later and the company is currently setting up to explore them. The problem is, they don’t have any money. The latest 10-Q covers the quarter ended September 30 and it contains the following figures:
- cash: $6,289
- current assets: $14,378
- current liabilities: $36,848
- no revenue since inception
- quarterly net loss: $317,180
Over the last two months they sold some shares to a Marshall Islands entity called Rooftop Investments, Ltd for total proceeds of $200 thousand, but we read in the 8-K forms that most of the cash will be used to make the payments associated with the acquisition of the leases which means that some more money will need to be raised if GFOX are ever to start exploring.
In the meantime, there’s something more sinister you need to worry about.
The more experienced among you might have already noticed that GFOX has all the characteristics usually associated with penny stocks set up for a promotion – the new business plan, the stock split, the change in the name, and the new ticker. Not surprisingly, when you have a look at our database, you’ll see that a total of thirteen emails have been sent between November 17 and November 19. Do a bit more research, and you’ll find a landing page set up especially for the pump. The budget stands at more than $270 thousand and while this is not as high as what we’ve seen from other campaigns, it’s still big enough to warrant some extra caution. Especially when you consider who’s touting GFOX.
It’s Mr. Tobin Smith who, in case you have forgotten, got fired from Fox News when he tried to artificially inflate the price of Petrosonic Energy Inc (OTCMKTS:PSON). As you can see from the chart on the right, the predictions of a bright future have turned out to be somewhat overstretched. Of course, PSON isn’t the only promotional disaster created by Mr. Smith. North American Oil & Gas Corp (OTCBB:NAMG) is desperately trying to get back to its former glory, but it’s clear that it’s still a long way off.
Now, Fox News’ former commentator is telling us that GFOX will reach a near target of $6.20 and that it could go all the way up to $11 in the long run. We’ll leave it up to you to decide whether you should trust his predictions this time, but while you’re contemplating the options, we would like to draw your attention to one of GFOX‘s older filings.
When you read through it carefully, you’ll see that back in October 2012, a total of 1,780,000 shares were sold to unnamed investors at a price of $0.01 per share. When you consider the effects of the stock split from June, you’ll see that the aforementioned investors’ holdings now amount to no less than 14,240,000 shares. The profit opportunity for them is massive and we reckon that they can take advantage of it at any time. That’s why, carefully considering all the risks associated with the promotion is absolutely vital.