Borislav Tonev

Pumpers Keep Quiet As North American Oil & Gas Corp (OTCBB:NAMG) Attempts To Recover

by Borislav Tonev September 17, 2013
29NAMG.pngYou want to know how bad the effects of a paid promotion can be? Look no further than the chart on the right. It represents North American Oil & Gas Corp (OTCBB:NAMG, NAMG message board)'s performance over the last couple of months and, as you can see, while a few weeks ago, it seemed unthinkable for the ticker to drop below the $1 per share mark, right now it seems to be struggling to jump above the same exact threshold. Why is that?

Well, it's because a third party called Genius Marketing splashed out around $1.7 million to pump NAMG. Mr. Tobin Smith (famous for other promotional failures like Petrosonic Energy, Inc. (OTCMKTS:PSON)) was hired to write a few words of optimism and to put a rather ridiculous $5 per share price target on the ticker. His arguments were plastered all over emails, landing pages and "research" reports and were sent out to numerous investors in an attempt to get everyone fired up.

The effects were almost immediate. At the beginning, the ticker showed some signs of hesitation, but a surge began on July 29. Less than two weeks later, on August 9, NAMG registered its 52-week high of $1.67 and at that point, it was clear that the pressure will eventually get too much and that the rally won't go on forever. The wiser investors sold their holdings and with smiles on their faces, set a course straight to the bank. Others, however, still believed that Mr. Smith's $5 price target is possible and they were in for the shock of a lifetime.

6WTER.pngThe very session following the 52-week record erased more than a quarter of the value. NAMG tried to recover and some green sessions were logged, but it was clear that the ticker was on a course towards the bottom of the charts. The slide, from then on, wasn't as violent or as horrific as the one displayed by Alkaline Water Company Inc (OTCBB:WTER) over the last couple of days, but it's fair to say that the behavior wasn't exactly confidence-inspiring. Especially for an oil company that could make you "incredibly rich".

The pumpers tried to break the fall and every few weeks, a new batch of emails saying the same exact things would hit our inbox. The alerts weren't particularly effective, however, and despite the promoters' best efforts, NAMG closed last Wednesday's session below the $1 per share mark.

Once that happened, the newsletters went quiet and under its own steam, the ticker seems to be willing to recover. As we mentioned, however, the attempts are not that successful and we're not even sure if a price above $1 per share really is fitting to NAMG's current financial situation.

Estimated at yesterday's close of $0.98, the market cap amounts to nearly $60 million and for that sort of money, you get a publicly traded venture that has around $350 thousand in assets, $724 thousand in liabilities, an accumulated deficit of around $1.4 million and no revenues since inception. You also get a company that has taken a severe blow to its credibility due to the massive promotional campaign that the stock underwent. Not exactly the bargain of the century, you would agree.

Another pumped small cap venture that displayed an interesting performance yesterday is PacWest Equities, Inc. (OTCMKTS:PWEI). As you probably know, PWEI is Awesome Penny Stocks' latest pick and it turns out that it's also one of the worst that they have ever presented their subscribers with. As you can see from our coverage, the SEC decided to step in and put an abrupt end to the pumping fiasco just days after it started. Could the same thing happen to NAMG? Well, it's a bit late now since the promotion seems to be over. Still, keeping all the possibilities in mind is definitely a good call.

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