Windstream Technolog (OTCBB:WSTI) Gains More Altitude

Nearly 1.3 million Windstream Technolog (OTCBB:WSTI) shares changed hands yesterday pushing the dollar volume up to $2.23 million. In the meantime, the stock added another 9.5% to its value and finished the day at $1.85 per share.

This was the eighth consecutive green session for WSTI. Since June 16, the stock has gained a total of 94% and the cumulative trade value during that period amounts to around $10 million. The performance certainly is decent, but unfortunately, there are a couple of things that could hamper the progress in the very near future.

WSTI‘s run is caused by nothing more than hype and excitement coming from a $900 thousand paper mailer pump. As you probably know already, the entity responsible for the promotion is called Wall Street Revelator which is not necessarily a good thing.

The same people tried to pump Maxwell Resources Inc (OTCBB:MAXE) back in December 2012 when the stock was still hovering around the $0.70 per share mark. Right now, it’s struggling to stay above $0.02.

Will WSTI follow in MAXE‘s footsteps? We’re about to find out. It would appear, however, that Wall Street Revelator made a mistake that could prove costly.

More and more pictures of the hard mailer brochure are appearing around the internet and more and more people are starting to pay attention to the promotion. As you probably know, the first page of the paper mailer displays Tesla Motors Inc (NASDAQ:TSLA)’s CEO, Elon Musk and it implies that the electric car maker could soon be benefiting from WSTI‘s revolutionary products.

The thing is, we read in this article that nobody spoke to Mr. Musk or TSLA before putting their names on the front page of a promotional brochure. As you can see, a spokesman said that any claims about a connection between TSLA and WSTI are “misleading and inaccurate“.

If Tesla decide to come up with an official denouncement, WSTI could be in for a serious crash. What’s more TSLA‘s spokesman also said that they are “investigating” the matter and if they decide to alert the SEC about it, the consequences could be even more severe.

More than a few promoted penny stocks faced the Commission’s wrath over the last few months. Pingify International Inc (OTCMKTS:PGFY) is one of the more vivid examples of such tickers. As you can see from the chart on the right, trading is once again active, but it’s now taking place on the Gray Market and it’s done at levels way below the pump-induced heights.

WSTI‘s situation could be pretty much identical if the SEC decide to step in and put an end to the promotion which would be a shame because, at least as far as the press releases are concerned, the company is trying to achieve something. Earlier today, for example, they announced that they have opened a new office in India and said that they expect a lot of additional revenues coming from Asia.

This, however, will not amount to much on the Gray Market. That’s why, carefully considering all the risks is absolutely essential.