Golden Edge Entertainment Inc (OTCBB:GDEE) Craters

What goes up must come down” a wise man once said. As popular as the proverb is, however, it doesn’t always ring true. Take Apple Inc’s share price, for example. If you check out the longer-term chart, you’ll see that it has been going up for quite a while and although there are corrections, the iPhone maker has never really experienced a terrible crash. Unfortunately, the same can not be said about Golden Edge Entertainment Inc (OTCBB:GDEE).

Investors first started paying attention to GDEE at the beginning of the month. Even by OTC standards, the ticker was quite explosive. It soared from just over $0.60 all the way to more than $3 per share in a matter of less than two weeks and it provided plenty of opportunities for savvy investors to make some quick and easy money. On August 21, however, the stock suddenly stopped and it turned on its heel.

The fall was quite horrifying. First, on Friday, it wiped out a whopping 44% of its value and yesterday, it incinerated an even more shocking 57%. The ticker closed Monday’s session with a price of $0.72 per share which, in case you haven’t calculated already, means that more than three quarters of GDEE‘s market cap went down the drain in a matter of just two trading days.

Two immediate questions appear: “Why did that happen?” and “Can the GDEE claw back at least a portion of the lost ground?”.

The crash occurred because GDEE never really deserved to be sitting at over $3 per share in the first place. It was put there by the pumpers from Equities that Soar and My Soaring Penny Stocks who received a grand total of $37 thousand to pump the stock.

The people who knew what the company’s latest 10-Q looks like were well aware of the fact that sustaining the $3 levels wasn’t realistic. Here’s a summary of the Q2 figures:

  • total assets: $240
  • total liabilities: $1,563
  • NO revenue since inception
  • quarterly net loss: $12,770

So, now that we’ve established what caused the massive crash, we need to see if it’s reversible.

About twenty minutes after today’s opening bell, GDEE is sitting at $1.05 per share which represents a 45% bounce. Not a bad start, but unfortunately, this is again due to the pumpers who sent out some more emails earlier today, saying that the 76% drop from the last two days has created a massive buying opportunity. We already saw what promo-induced spikes can do to the stock, so it’s fair to say that treading carefully isn’t such a bad call.

If the pumpers go away and if the people behind GDEE prove to us that they can really carry out their business plan, the stock might just get back on its feet. Yet, something as simple as the exercising of certain warrants could push it back down. It can because the warrants in question are exercisable at a price of just $0.05. This, by the way, is something we’ve been talking about since the very first days of the promotion.

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