Windstream Technolog (OTCBB:WSTI) Gets a Paper Mailer Pump
Windstream Technolog (OTCBB:WSTI) is a technology company that is trying to develop cost-effective renewable energy solutions for people who don’t have access to the grid – a noble task, no doubt. They have apparently patented their products and they seem to be moving along. WSTI have even posted some pictures of their factory and workers on their Facebook page (something you don’t see every day in the world of penny stocks).
It’s not just publicity. According to the latest press release they received a $8.1 million purchase order from Jamaica’s National Utility Company three weeks ago. This deal will coincide with the $14.5 million order that was previously announced and will help them expand the product line.
One of the few problems that we can find with WSTI is the latest 10-Q which brings some mixed emotions. Here’s what the company recorded on March 31:
- cash: $13 thousand
- current assets: $2.2 million
- current liabilities: $4.1 million
- quarterly revenues: $237 thousand
- quarterly net loss: $792 thousand
As you can see, the cash reserves are somewhat dismal, there’s a lot of debt, and profitability is still nowhere in sight. Still, the shareholders can at least hope that the huge purchase orders will change all that.
By all means, WSTI looks like one of the more solid companies on the OTC Markets and it would appear that investors are finally paying attention to the stock. Yesterday they traded more than $530 thousand worth of shares while the price jumped up by around 20%. WSTI closed the session at $1.35 per share and if more people jump in, it might go further up.
Unfortunately, there is one major problem.
Yesterday’s volume spike wasn’t caused by WSTI‘s clever products. It wasn’t the result of the optimistic news, either. The increased interest was, in fact, due to a hard mailer campaign that seems to be running at the moment.
Unfortunately, the investors who have uploaded pictures of the brochure didn’t photograph the disclaimer which means that we don’t know what the budget is. We can see, however, that the entity standing behind the pump is called Wall Street Revelator (WSR).
The same people were responsible for the paper mailer promotion on Imogo Mobile Technologies Corp (OTCMKTS:IMTC). As you probably know, IMTC got suspended by the SEC on February 19 and right now, four months later, it’s on the Gray Market and it’s traded at $0.07 per share (91% below its pump-induced 52-week high). WSR are also involved in the hard mailer promotion for Eco-Shift Power Corp (OTCMKTS:ECOP). ECOP has so far managed to dodge the suspension order, but, as you can see from the chart on the right, it’s not doing brilliantly, either.
We do know for a fact, however, that quite a lot of stock has been issued at some massively discounted prices over the years. If you take a look through the older filings, for example, you’ll see that in May 2008, WSTI (then called Solarte Hotel Corporation) sold 15 million shares of common stock for just $10 thousand. During Q1 of 2014, WSTI converted some debt into common stock at a rate of just $0.25 per share (81% below the current market price).
We probably don’t need to tell you that if a large amount of discounted stock hits the open market, the ticker is in for a crash. That’s why, doing your own due diligence and carefully considering the risks is absolutely essential.