Green Oasis (PINK:GRNO) opened down 20% this morning and has since been recovering.  Our good friend Gaetano made write up today on GRNO Stock (GRNO.pk).  A few of the heavy commenters on IHUB seem to be suggesting a huge short position that may be squeezed.  We will do a follow up on this one later.

Recognized as one of the most messed up companies on the market, SPNG.PK can be seen as potential buy only by people with high risk tolerance and gambling addicts. On forums, people were hoping (and probably still are) for a short squeeze and a price run up. The keyword is hopping.

People stick to SpongeTech because they have a real product. A real product and crazy management who drive the company sideways. If you have an urge to gamble some money without visiting a casino, time yourself and go ahead cause you’ll get a change when these guy’s release some spacecraft cleaning sponge targeting NASA.

How did IDCN Stock (IDCN.pk) obscure penny stock trade almost 1 Billion Shares without ever releasing any financial statements?

Usually this is done through Hype disguised as insider information campaigns, and it certainly isn’t through investors reading reliable information and then making informed decisions.  On the Pink Sheets Website they have issued a harsh warning to investors that dissemination of information on this stock may be a criminal activity as the company has never come forth with financials.  Still this hasn’t stopped the stock from trading higher on volume approaching 1 billion shares yesterday.

IHUB IDCN - The source of the promotions?

Searching the IDCN Message Board we were able to find little to go on other than signing deals with stock promoters and making Letter of Intent agreements which we fail to see any substance behind.  Most stocks like this end up declining 99% within relatively short periods of time.  Unless more clear information is presented there is no way we would be investing our own money.

Recently there has been a lot of activity surrounding Bonanza Oil and Gas.  The shares have been trading quite actively after they announced some seemingly positive news and had a few research reports issued on them.  The stock has declined over 80% since from it’s February highs.  Our concern with Bonanza is the structure of their convertible notes.  They have made some positive steps to correct this, but a toxic convertible is still a possibility even with the restructuring.

Here is a clause we dug out of a February 9th 8k Filing issued by Bonanza:

“The Restructured Notes were convertible into common stock, at Triumph’s option, at the lesser of (i) $0.0025 or (ii) a 50% discount to the average of the three lowest trading prices of the common stock during the 20 trading day period prior to conversion (the “Variable Conversion Price”). Triumph has agreed to restrict its ability to convert the Restructured Notes and receive shares of common stock such that the number of shares of common stock held by it in the aggregate and its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. On January 29, 2010, the Company entered into a Letter Agreement with Triumph pursuant to which the Restructured Notes were amended removing Triumph’s ability to convert at the Variable Conversion Price.”

In Layman’s terms, the previous deal allowed Triumph to sell stock at .0025 per share or a 50% discount to the market over the last 20 days.  In either event investors were buying for seven cents while Triumph can sell for a fraction of a penny.  These types of convertibles are massively dilutive to shareholders.  The restructuring caps it at 4.99% of outstanding shares but in our opinion still doesn’t fix the problem.  As they can continue to issue more shares at huge discounts to the market and dilute shareholders.

Looks like whatever was fueling the (System Sensors SSYO.pk) rally is already out of gas.   Yesterday we issued a cautious write up on the parabolic rise of the stock.  The stock ended up trading down 67% on the day, on about 17 million shares volume.