Virtus Oil and Gas Corp f/k/a Curry Gold Corp. (OTCBB:VOIL) Crashes On Record Dumping of Shares
In our previous articles about Virtus Oil and Gas Corp. (OTCBB:VOIL) we warned our readers that the only reason for the recent climb of the stock was the artificial hype created by a paid pump. The promotion featured the creation of a special landing page touting the company.
The campaign started pushing VOIL up the stockchart almost immediately and in just seven sessions it ran from a low of 70 cents per share to a high of $1.46. Yesterday the positive performance continued and VOIL slowly climbed to $1.50 but then a rather negative SeekingAlpha article was published causing the stock to fall straight for the bottom. In less than two hours the stock lost more than 32% of its value and at the end of the session was sitting at $0.94.
In the article the author discussed much of the same red flags around the company. Let’s start with the obvious discrepancy between VOIL‘s market cap and its fundamentals. Even after the massive crash from yesterday the company still commands a ludicrous market cap of over $45 million while at the same time they finished the quarter ending February 28 with:
• $62 889 cash
• $63 462 total current assets
• $101 thousand total current liabilities
• ZERO revenues since inception
• $700 thousand net loss
• $63 462 total current assets
• $101 thousand total current liabilities
• ZERO revenues since inception
• $700 thousand net loss
But an even greater danger than the depressing financials is the issuance of millions of extremely cheap shares. Back in 2009 VOIL sold 1.3 million shares to 22 seed shareholders for proceeds of just $13 000, or $0.01 for each share. On August 30, last year, a 14-for-1 forward split was performed and the people who bought those shares now owned 18.9 million shares priced at $0.0007 each.
In order to finance its operations VOIL has also issued millions of discounted shares to a Marshall Islands entity called Fieldstone Industries, Inc. Just days before the forward stock split Fieldstone received 150 thousand shares at $0.33 each that turned into 2.1 million at $0.02 each. More recently they bought another 2 million shares priced at $0.40. Even after yesterday’s crash these shares are still more 50% cheaper than the current market price.
As you can see there are quite a lot of people that could benefit from the increased attention generated by the paid pump. Will VOIL continue to correct to even lower price ranges remains to be seen but if the performance of another pumped stock – Windstream Technolog (OTCBB:WSTI) is anything to judge by the drop could become even deeper. Yesterday WSTI lost another 38% of their price and at the end of the day were sitting at $0.55. In just four sessions the stock has wiped more than 75% of its value.