Penny Stocks VIP Takes a Crack at 1st NRG Corp. (PINK:FNRC)
There is a proverb saying "if at first you don't succeed, try, try again." Paid pumpers often follow that idea. Penny Stocks VIP is one of the pumpers behind the upcoming campaign to inflate the price of 1st NRG Corp. ( PINK:FNRC ). With FNRC they have their work cut out for them. The stock has been promoted at least twice in recent months, and every time the results have been dreadful. The first attempt at pumping FNRC was in late October. Back then FNRC reached a high of $0.55 per share. On Friday, FNRC closed flat at $0.05 per share - more than 90% down from the first pump. The only thing which may make the pumpers' task easier is that at the current price the market cap of FNRC is about $3.4 million. This, however, may not be enough. Penny Stocks VIP has shown tremendous potential to tout stocks that tank almost instantly, even when the price seems low. A very recent example is the pump on Dragon Polymers, Inc. ( PINK:DRAG ). It started last Thursday and at Friday's close DRAG was down about 50% from the pump's high. Last Monday the pumper was paid to tout Safebrain Systems, Inc. ( PINK:SFBR ). The pump got SFBR up to $0.16 but the dumping started the very same day and by the end of the week the price was down more than 66%. FNRC claims it's an exploration and production company. The latest financial report shows FNRC has generated revenues but the number is nothing less than disappointing - $7,080 for the quarter ended Sept. 30. The bottom line was a net loss of $213 thousand. The company claims it has about $14 million in restricted cash, however, it has disclosed very little about the conditions it needs to meet to get access to it. A recent $7 million credit facility suggests FNRC can't satisfy the requirements to use that restricted cash. The details about the new credit line are also fuzzy and the part that is clear doesn't put FNRC in the best position. If the price stabilizes or goes up, the creditor would be able to convert at discount prices and dilute current shareholders. Even if FNRC gets the full $7 million this will just barely cover its liabilities. Until FNRC demonstrates it has what's needed to turn a profit it may struggle to sustain even a $3.4 million valuation. The sketchy reports about the company's financing deals may be enough to keep away even traders prone to gambling.