An Echo, But Not A Sound
David Merkel | Jan 27, 2013 01:40AM ET
Time for my penny stock scoreboard:
You have to admire the consistency of capital destruction among promoted penny stocks. Tonight’s loser-in-waiting is Echo Automotive. Here is the bullet points to illustrate the future carnage:
- Minimal Revenues
- Negative net worth
- Negative earnings and getting worse.
- Management sucking in a lot in salaries.
- The long list of stock promoters engaged by DH Media LLC. This is only the email effort. They paid $1.9 million to disseminate the shiny, colorful 10″ x 14″ “newsletter” via snail mail. They paid $25,000 to the lout that wrote the copy, or maybe, spiffed up DH Media’s bullet points. Add in disclaimers in 5-6 point type.
- this example from the FBI . I’ve posited that idea before. Given all of the non-identifiable shell companies involved, that could be going on here also. It would be interesting to try to prove the existence of and break a ring like that.
Anyway, steer clear. The company is horrid, and with promoters around, those that buy and hold for any significant length of time (say 1-3 months) are 99% certain to lose money. Don’t be one of the pockets that gets picked.
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