Todor Pichurov

Lithium Exploration Group Inc (OTCMKTS:LEXG) Is Free Falling

by Todor Pichurov November 12, 2015

After an excited surge up the charts in early November, Lithium Exploration Group Inc (OTCMKTS:LEXG, LEXG message board) is now dropping like a rock. Yesterday the stock lost another 38%, making for a total slide of 54% within the space of two market sessions.

LEXG shareholders were getting giddy with excitement over a press release the company dropped on Nov 6. The announcement was the reason the stock ripped from $0.06 per share all the way up to $0.35 on Monday. LEXG informed the company was doing “final preparations” on an oil unit, providing few further specifics. The glaringly unsustainable climb set off by the PR was cut short as traders used the price hike to cash out.

If only LEXG was as diligent with its required filings as it was with its PR, things might have been different. In a newsletter dated November 2, CEO Alex Walsh reassured shareholders that the company's overdue annual report would be out “in the next few days”. It's not clear what exactly LEXG's definition of “few” is, but it obviously means “more than 10”, as the report is still missing. This in turn led to LEXG being stamped with the red triangle and a Pink Limited Information status on its OTC Markets page. The report in question was originally due on the last day of September, meaning it's about a month and a half late now.

Effective September 9, the company's authorized common stock went up fivefold, to 10 BILLION shares. This would not be so alarming if LEXG had not already executed TWO reverse splits in 2015, one decreasing shares at a 1-for-20 ratio in February and another decreasing them at a 1-for-200 ratio in September.

Traders can probably figure out on their own why the company needed to increase authorized shares to TEN BILLION despite this massive split which already left tons of room for new dilution.

Hopefully the annual report will be up soon and will shed some light on what exactly is going on with LEXG's financials and share structure.

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