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By Ekaterina Zelenkova
Jul 29, 2011

Dilution Shakes Portage Resources Inc(NDA) (PINK:POTG) Stock

POTG_price chart_290711.jpgYesterday, dilution news like a humongous monster smashed investors' willingness to support the long time expected rally on Portage Resources Inc(NDA) (PINK:POTG) stock.

Although the optimistic mood of the ongoing stock promotions and stock alerts, POTG struck down. Shares' price plunged additional 11% after the preceding 33% roll down on Wednesday.

Even the auspicious at first sight recent disclosure about the unanimously approved by the company's BOD dividend was not able to push up POTG. Investors unanimously “voted” for the shares' down trend.

Looks, these days, shares' performance is not dependant on the bullish mood and optimistic news about company's development. Few factors influenced the closing price of $0.365 per share as of yesterday.

POTG_from the site.pngOne of them is the political concern of investors, that the presidential victory of Ollanta Humala in Peru may lead to a wave of nationalizations and higher taxes for foreign companies. Since the topic was discussed widely, this factor most probably reflected the performance of POTG earlier this month.

Last financial statement of POTG is the second “bear”, that broth the bearish mood on company's stock.  It recks little for how long were the company's PR initiatives and how well were paid third parties' stock promotions.

According theory, there are two main methods used to analyse securities and make investment decisions. These are the so called fundamental and technical analysis. While the fundamental analysis is related to “digging in” into the company's financial statements, the technical analysis uses other tools for securities evaluation, such as statistics, generated by market performance of shares.

Even only observation of revenues, expenses, assets and liabilities of Portage Resources Inc.

with no detailed analyses of the other company's financial aspects may suggest to investors, that POTG may have difficulties in implementation of its ambitious plans. As of the end of February, the company reports:

  • $533K in cash and cash equivalents,
  • Zero revenues,
  • Total assets  of $533K,
  • Total current  liabilities of $129K.

On the background of announced by POTG vast exploration plans, the most recent decision of company's management to grant stock holders dividend in shares sounds almost desperately. A monster dilution of company's capital is just forthcoming.

This spring, Portage Resources Inc. already made a change in company's capital structure. Shares had been increased by 10 for 1 split. Now, the next wave of stock inflation comes. Yesterday, the company announced that: “The dividend shares when issued will increase the Company’s issued and outstanding common shares to 4,452,000,000 common shares, all with par value of $0.001.”

Cash in “K”, shares in “MMM...”.

Article Comments:

aidonka wrote: 4:39 pm Aug 03, 2011
Zdravstvuyte, Ekaterina, Thank you for this great article: i will highly appreciate your kind advice: i bought
1000 shares of potg when they were $0.81 using my small IRA account and now feel most desperate after it
fell roday to $0.20!! please, tell me should i wait or get rid of the stocks with 80% loss, i fo not kno
w what to do, i am not experienced trader and was just hopin to make some money PLEASE ADVICE (I AM FROM
Guest wrote: 9:21 pm Nov 22, 2011
please tell me what is the future in the coming days as far the prices i have 15000 shares with a average 0.1
250 cent a share thank-you my name is louis t., from montreal canada thanks again
Guest wrote: 6:49 am Nov 23, 2011
Dear Louis t , if you bought POTG at 0.1250 cent a share as you stated, you've done one of best possible deals
on the stock. Yesterday, POTG was worth 0.0739 dollar per share. If the mentioned cent is a dollar, as o
f yesterday you've lost 13% on your investment. I also keep the hope that the share price may g