Todor Pichurov

China Logistics Group, Inc. (PINK:CHLO) Soars on Liquid Pennies Pump

by Todor Pichurov January 8, 2013
CHLO_chart.pngYesterday the stock of China Logistics Group, Inc. (OTC:CHLO, CHLO message board) that was idling under a penny in a near-death state was revived by a pump campaign run by a number of promoters. CHLO stock shot up over 1500% to a close of $0.045.

The pump started on Jan. 6 with a number of pumpers touting the stock's 'promise', Liquid Pennies perhaps the most prominent pumper outfit among them. The pumps were entirely based on the fact that CHLO was dirt cheap at the then-current price and could bounce to its November 'highs' of $0.011. As a matter of fact CHLO never closed above a cent in about 6 months time.

The pumpers didn't even give a valid reason why the stock would move up. They could hardly come up with one for a China-based company that never came up with any news or exciting announcements. The stock was idling on very low trading volumes and sub-penny prices for months, completely abandoned by traders. CHLO didn't even manage an optimistic press release to warrant the hype being created.

The company is not doing well financially as well. Their latest filed report is from Q3 of 2012 and contains the following numbers:

 

  • $2.1 million in cash
  • $6.1 million in current liabilities
  • $204 thousand quarterly net loss

 

Over all of 2011 CHLO logged a net loss of $1.3 million and it seems the trend of logging large losses despite supposedly sizable revenue is ongoing. In addition to that, as of September 2012 the company owed related parties the sum of $1.2 million. All those numbers should give investors a bit of an idea what they are walking into. The stock's movement yesterday was virtually based on nothing but promo hype, with no positive news, no solid financials and nothing happening to warrant such interest in a near-dead stock.

LBTG_fail.pngLiquid Pennies promoted other companies that ended up destroying their subscribers' investments in a single day. In a similar fashion to their pump of CHLO which they said would 'rebound', Liquid Pennies also alerted their subscribers to another so-called rebound of Liberty Coal Energy Corp. (PINK:LBTG) on October 10. Sadly, on the very day of the alert, the stock went crashing and is currently 80% down from the 'bounce' high.

Traders are advised to be very careful with promoted stocks and do their own due diligence. Promoted stocks sometimes offer an opportunity to make a quick buck if you feel like risking it but the danger of losing your entire investment more than offsets the usually tiny profit window that may not even be there.

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