The stock of Kleangas Energy Technologies, Inc. (OTCMKTS:KGET
, KGET message board
) managed to once again lure investors to buy it up. After a couple of depressing sessions which saw KGET slide down on ever decreasing volumes yesterday they released another PR article which caused the stock to skyrocket.
Although the news didn't have the same impact as the first pellet order, which pushed KGET to increase its share price sevenfold in just a day, the stock still managed to do an impressive run. Starting from an opening price of $0.021 it closed the trading day at $ 0.028, more than 72% above its previous close. Despite the extremely positive outcome the performance of the stock was quite turbulent making the current price levels rather unstable.
Investors are right to be cautious when dealing with the company. As we said yesterday they announced a second order for their pellets that was even more bombastic than the first one. Apparently their subsidiary Green Day Technologies has received a request for $100 million worth of pellets but due to the inability of KGET to produce the needed quantities they will initially try to fulfill "just" $20 million of the order. This will supposedly bring the expected revenues for 2014 to somewhere between $30 million and $40 million. Well, that certainly explains the renewed enthusiasm towards the stock.
Even we would be impressed if the news article contained at least some concrete information. The name of the buyer is not mentioned and neither is his country of origin. For now no 8-K filings about both orders have been filed leaving investors to rely solely on the words of the company itself.
Prior to the acquisition of Green Day the financial state of the company was more than desperate. KGET finished the quarter ending September 30 with exactly:
$29 cash and total assets
$469 734 total current liabilities
$36 750 net loss
Since the filing of the report no new sources of funds have been announced. Investors will also have to keep in mind that seed shareholders of the company hold around 316 million extremely cheap shares which were bought for the total sum of $25 000. Even if they now own just a portion of those shares they still stand to gain considerable profits at the current inflated prices.
There are numerous examples of pennystock companies claiming millions upon millions of dollars in contracts that in the end never materialized. Ultimately it is up to you to determine what KGET's real potential is but before you jump in based solely on the hype be sure to do your own research and never invest unaffordable sums.
Yesterday the pumped stock of Gray Fox Petroleum Corp. (OTCMKTS:GFOX) continued to wipe out its gains after it dropped another 17% and closed at $1.50. There is still a lot of room for corrections before the company reaches its pre-pump prices of below a dollar.