After climbing on the charts assisted by pumps, yesterday Premier Holding Corp. (PINK:PRHL
, PRHL message board
) closed over 12% in the red, on unprecedented volume, comparable to the volume generated as the July pump for the company crashed and burned.
Promoters who touted PRHL, most notably Research Driven Investor (RDI), who disclosed $50 thousand in compensation for their efforts, called it a 'proven winner' and promised that 'the money is coming'. Money seems to have indeed come, but it may have gone into the pockets of those who wanted to get out of the stock, as over 1.4 million shares changed hands, sending the price down.
In the last pre-market email on PRHL, Research Driven Investor urged subscribers to go do their own research on the company's website. We believe it's a lot better to do research using the company's official filings, and those paint a different picture. As per the last available quarterly financial report of PRHL they had the following as of September 2012:
- $2 thousand in cash
- $713 thousand in current liabilities
- $81 thousand in revenue for Jan-Sep 2012
- $2.1 million net loss for Jan-Sep 2012
The company generated zero revenues in Q3 and the net loss for the first nine months of last year exceeds the period's revenues about 25 times. The company secures cash through issuing common stock, such as the issuing of shares for proceeds of under $500 thousand that diluted the company by over 5% in January 2013.
PRHL filed an 8-K, detailing that their acquisition of The Power Company USA LLC, which was previously announced to be made in cash and stock, will be made entirely by issuing 30 million shares of PRHL. It will be a while before investors get the consolidated reports that will give an idea how the acquisition affected the company's financials. In the meantime, all that is immediately visible is impending 50% dilution.
We covered PRHL in the summer of 2012 when another pump campaign destroyed the stock when it came to an end, obliterating millions of investor cash. We alerted our readers ahead of the 36% crash that followed. Back in July promoters were talking about 'billion dollar PRHL news', now they are calling it a 'proven winner'. It may well be a case of history repeating itself through renewed pumps.
Investors are advised to do their own due diligence and be very careful with promoted penny stocks, especially such that have crashed hard after previous pump efforts.