The new year brought several forgotten stocks back on track, and an old acquaintance surfaced with a new business model. The Teralene Fuels Corporation (OTC:GSPT, GSPT message board) is not shy about changing names and calling on investors with a fresh identity- so far the alternative fuels and green tech company is on its seventh moniker. But we need to look further into the cause of an eightfold jump in this double-zero stock.
The ticker, which has not been in promotion since the summer of 2012, went up yesterday from $0.004 to $0.015, a more than 800% jump. The volumes were close to 40 million shares out of 139 million shares outstanding, an activity unseen on a usual day where volumes reach only a couple of million shares. The ticker is not in active promotion, and there are no news items surrounding the company, so our guess is the extremely low price may have invited buyers to try out doubling their investment easily.
Beside costing a tenth of a cent, Teralene Fuels has little to offer, both as a producer of a unique fuel formulation and in its previous attempts as an eco energy developer and a mining company. The group has underwhelming financials:
With such a track record, not much different in past periods, Teralene Fuels seems to have become a fast bid, and we may expect to see a sharp correction very soon. Have in mind that the quoted assets contain just around $3,000 in liquid securities and the rest of the reported sum comes from “intangible assets” or the valuation of technologies and patents, which makes the company's situation unfavorable in terms of debt. Also, Teralene Fuels has no marketing activity, just losses from development, and may not see sales in the near future.
Alternative energy sources and mining are a common theme for many penny stock companies, and several are in active promotion. A somehow low-priced bid, Pioneer Exploration, Inc. (OTC:PIEX) is being pumped by The Stock Scout as the next promising inventor of clean coal technology. However, keep in mind that most underpriced bids, with or without promotion, can really test your capabilities to absorb risk and losses.