Todor Pichurov

Great China Mania Holdings, Inc. (OTC:GMEC) Pumped for Another $50 Thousand

by Todor Pichurov January 31, 2013
4GMEC_chart.pngYesterday Great China Mania Holdings, Inc. (OTC:GMEC, GMEC message board) lost what momentum it had gained, carried on the non-stop pumps that have been circulating people's email boxes, and closed nearly 14% down at $0.093 per share. Still, pumpers Penny Stock Buyers, compensated $50 thousand for their efforts, sent another email touting GMEC yesterday. 

The stock has seen an lot of pump rounds, each extending over multiple days. The chart has the start of major waves of promotions marked, to give a better visual idea. It's worth noting that since early November, the stock has only ever moved up when it was supported by paid promotions. In November, with no active pumps, the stock managed a drop from $0.16 per share down to its first December close of $0.047, nearly 70% lower. The December pumping started on Dec. 10 brought the stock back up over 8 cents by the year's end.

This round of promos ended on Dec. 31, then the stock was left alone by promoters for a couple of weeks. The result was GMEC slipping back down, flattened to as little as $0.027. On Jan. 18 the paid pumps resumed and are still ongoing, lifting the stock price once again. The pump timing and length can be examined in detail in our pump history profile of the company.

In summation, over the last three full months GMEC stock moved up only when propped by pumps, and even that movement was shaky on a day-to-day basis. On paper GMEC have the following, according to their latest quarterly dated September 2012:

  • $231 thousand in cash
  • $1.3 million in current liabilities
  • $1 million in quarterly revenue
  • $305 thousand in quarterly net loss

The revenue reported as generated is chewed through by expenses and costs, leaving the company in the red. Those numbers are all from 4 months ago, hardly recent by any estimation. The closest thing to actual hard financial information GMEC released over this period is an 8-K announcing a financing agreement with Kodiak Capital Group, LLC for up to $2 million. Considering Kodiak's history of multiple canceled financing agreements, the deal with GMEC is not too likely to happen as well.

The company also seems to lease assets from a company wholly owned by one of GMEC's directors. Over 2011 and 2012 such related party payments resulted in GMEC cashing over $250 thousand to China Culture Limited - the entity wholly owned by an unnamed GMEC director. It would have been nice to see some more recent filings from GMEC instead of wave after wave of PR hype that somehow coincides with the promos but so far this is not happening.

0ORYN_fail.pngThe promoters at Penny Stock Buyers previously touted other penny stocks that crashed hard once the pumps were over, evaporating investor dollars in the process. One example is the pump job Penny Stock Buyer ran on Oryon Technologies, Inc. (PINK:ORYN) in early October. The stock didn't run very high after the promo was over but later went to drop 50% by the month's end and closed 2013 about 75% down from the peak values of the pump.

Traders are advised to do their own due diligence and never trade solely on the recommendations promoters are dropping into their email inboxes.

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