Jovita Baltrusaityte

Doral Energy Corporation (OTCBB: DEGY) Expects to Benefit from a Stock Split

by Jovita Baltrusaityte August 19, 2009
20090212-dorallo.JPGYesterday Doral Energy Corp. (DEGY.ob, or OTCBB: DEGY) announced that its Board of Directors approved a 5-for-1 forward stock split effective on September 14, 2009; this will increase the total number of shares outstanding from 17,674,010 to 88,370,050 shares. In addition the board approved an increase in the  total number of shares authorized from 400 million to 2 billion shares.

It looks like the company thinks that the present share price of $2.98 is too large for investors.  However, I am not so sure that this split is going to have any effect at all. Doral is also trying to benefit from the services of several stock promoters.

It was announced that DEGY has paid $3,750 to Small Cap
Investor. In addition, Street Insider expects to get a fee from $1,000 to $50,000 for the promotion of the stock. Maybe this is the better way to sucker people into the sector of oil and gas exploration. Unfortunately, it‘s not quite clear from where the company is going to get the money.

Looking at the latest quarterly results of April, many doubts start arising. The assets of the company constitute $1,561,000 in comparison to $1,818,000 which was declared in January 2009. Doral is still unable to cover its debt of over 7 million dollars.

All in all, do you still consider DEGY as the suitable company to invest in? Bear in mind its plans to split the stock, present financial situation, as well as stock promotion which is supposed to attract more investors.

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