PUMPs

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Nov 4, 2012 at 10:31 PM

PUMPs & dumpS

Red Flagging DANGERS In The Penny Market

GBGM Takes Another Go At Bamboozling The Public

Back in June, we told you about the lies perpetrated for the purposes of pushing a little scam known as Global Gaming Network ( GBGM ). Back in those heady days, shares were trading in the .40s and the stock pimps were boasting of the float being only 1.2 million shares. Our Jun 11, 2012 advisory on GBGM , which was published on the first day of that Pump & Dump campaign, correctly called BS. Back then, we told you that not only was the float not 1.2 million shares like the 19 pimps pushing this garbage were insisting, but that it had the potential to actually be 546.8 million shares and we illustrated the trading pattern on that day to prove it. We told our readers that it would crash hard within days and it did, trading as low as a penny and a half 11 days later after trading as high as 49 cents on the first of the P & D campaign. That high was achieved 42 minutes after the start of the P & D and was never seen again. Street investor losses are estimated to be at $6 - $9 million dollars, all of which lined insider pockets. Nobody, save for one or two lucky participants who bought at the open on the first day and sold exactly at the high (and the insiders, of course), made money.

Now it's almost 5 months later, GBGM shares are trading at less than 7/10ths of a penny, and Odd Marketing, the publisher of Penny Stock Crew and Stock Publisher, is going to have a go at deepening the insiders' bank accounts with a new P & D campaign. We wouldn't be surprised if other newsletters followed these two in the coming days, as the schemers still have tons of stock to dump.

GBGM's Chart June 11, 2012 to present - Not Pretty, Is It?

And the lies continue, although this time the company cops to a 61.2 million share float (according to its latest filings), a far cry from the 546.8 million shares we made a case for back in June. But at a minimum the change in number confirms the previous Pump & Dump campaign's intent, which was to dump insider stock. Remember? In June, everyone claimed the float to be 1.2 million shares. This means that at least 60 million insider shares were dumped onto the street over and since the June P & D. And as we have previously stated, there's plenty more where that came form.

Ah, but this time there's a new kicker. Since the old P & D, GBGM has entered into an agreement to sell more shares privately in order to raise up to $300,000 (sorely needed since in its last 10-Q filing the company claims to have 20 bucks in cash on hand). Unfortunately for old and soon-to-be-new bag holders alike, this new financing agreement is a form of a death spiral financing agreement, since the share sale price is not set. Rather, as the share price drops, the financier's purchase gets cheaper. To whit:

"The Purchaser hereby applies and agrees to purchase a certain number of shares (“Shares”) to be determined of $.000001 par value common stock (“Common Stock”) of the Company for an aggregate subscription price (the “Subscription Price”) of $300,000 all in accordance with the terms set forth in this Subscription Agreement. The Shares shall be purchased in installments of not less than $10,000 (“Installments”) of Purchaser’s sole choosing at any time during a ninety (90) day period commencing on the date hereof and terminating on December 31, 2012 (“Conversion Period”). The price for the Shares, at each installment purchase and conversion, shall be equal to an amount of Shares calculated at a rate equal to 75% of the OTC market price of the Company’s Common Stock based on a 10 day trailing average of the lowest bid for the Company Common Stock (“Conversion Rate”) at the date of notice of purchase and conversion and the payment of the portion of the Subscription Price to Company."

Now since the purchase agreement was signed and under the terms of the agreement, the purchaser was able to get stock at least as cheap as.$.004. But just for grins, let's assume an average price of a lofty $.007. If the purchaser was to spend the entire $300,000, another 42.9 million shares would be created! And there's your new Pump & Dump. Notice how this one starts just prior to the due date of the new financials (November 8-ish).

Has the company made any progress? Not hardly! Looking at the last two reported quarters (remember, that the P & D begins just before the new quarter is reported), cash on hand decreased from $363 to $20. Assets did increase by $100,000 but only in the form of new stock subscriptions, not from operations. And there's the matter of increased liabilities to $627,829. The good news is that revenues increased from zero to $343. Oooooo give me some of that!

In short, this is a suckers' bet, even if the stock pops for a brief moment. Just as last time, the profit takers will then have to compete with the insiders for the attention of the new suckers. We expect GBGM to be trading closer to the triple zeros by the end of the year.

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