USA Real Estate Holding, Co. (OTCMKTS:USTC) Arrives Late at the Promotions Party
USA Real Estate Holding, Co. (OTCMKTS:USTC) is the latest attempt for email promotion gone very wrong, very fast. In just a few days, the ticker managed to attract attention- just enough to be sold off in massive quantities and depressed to triple-zero positions. On Tuesday, USTC regained 40%, which shows some follow-up buying, but not before crash-landing from recent prices as high as $0.05. Dollar volumes were above $523,000.
It is no surprise that USTC used a play that is getting old and predictable. The paid pumpers stated that the former real estate company is making a bid for a leading position in the legal cannabis industry. This is not unusual for barely traded tickers, but in the case of USTC, the strategy backfired.
USTC received a total of 10 emails in April, for a budget of $30,500. The latest email is dated back to last week, April 17th. Stock Hideout took up this opportunity for a compensation of $10,000, but as it is easily seen, the promotion worked like a signal to sell. So investors’ forums see this as a price reset, where a high-priced ticker just cannot hold onto the positions.
For USTC, this means that it may stage a return at the new, rock-bottom prices, as a newcomer to the marijuana business. And while the enthusiasm has worn off a bit, there is room for newcomers making spectacular gains, especially in the short term.
What may stop the rush is the fact that USTC is de-registered with the SEC from the end of last year, becoming an alternative reporter. The OTC profile reveals that USTC has really slim resources for a real estate company. Indeed, USTC described itself as a development stage company, but its reports remain dismal:
- No revenues
- $29,000 net loss for 2013
- Zero cash and assets
- $132,000 total current liabilities
For now, USTC has not managed to bury itself in too much debt. On the positive side, the company will try to meet the deadline for pink sheet companies to update its financial filings or risk losing its OTC status. So USTC at least has some chance to release more news in the future. From now on, USTC will try its luck in two hot industries, cannabis, but also oil and gas.
Until that happens, though, USTC remains an amazingly risky ticker, with just 677 million shares in free float out of 1.8 million shares outstanding. Still, some opinions point to the potential for a rise toward more respectable prices.
When it comes to real estate and cannabis, other companies have tried out this strategy. Discovery Minerals Ltd. (OTCMKTS:DSCR) made a decent run, though its peak is at a still modest $0.0060, sliding back to $0.0033. .
Also, we can’t know if other tickers won’t be targeted for suspended trading, as the penalty on Growlife, Inc. (OTCBB:PHOT) continues. The SEC decided to stop the trading for several tickers it deemed overheated. Since then, the suspensions stopped, but there are enough risks around USTC, so avoid this wreck, unless you are prepared to absorb significant losses.