Swingplane Ventures, Inc. (OTCPK:SWVI) is currently subject to one of the largest and most blatant stock promotion campaigns that our team has witnessed during the past year. Recently the stock has ballooned from under $0.20/share to nearly $1 and unless a dramatic event takes place that alters the intrinsic value of the company, it is only a matter of time before this grossly overvalued $400,000,000 company reverts back to a share price that is more representative of its fundamental value.
We are dumbfounded by the notion that any reasonable investor would want to own stock in this company at prevailing market prices and in our opinion there exists an extremely lucrative opportunity for short-biased traders to generate returns in excess of 90% in less than one year. Based on 435,000,000 common shares outstanding as of February 1, 2013 we believe the fundamental share value is currently less than one penny and in time we expect the stock to reflect this value and trade for less than $0.01/share.
While we did our best to estimate the fair value of the company, it is very difficult to calculate the fair valuation of a stock that has:
- Zero revenues
- Limited operations
- Less than $50,000 in cash and cash equivalents
- A necessity to raise $12,000,000 during the next twelve months in order to move forward with the business plan; and
- A "going concern" designation and the intent to finance future development activities largely from the sale of public equity securities.
Aside from the fact that Swingplane Ventures has a severe lack of substance as an operational business due to the fact that they are an exploration stage company with very limited cash, we have identified a number of red flags that are so severe that we must question the company's motives since its formulation.
Anonymous Belize Entity Owning 300M Shares
On October 16, 2012, Swingplane Ventures announced that the company would issue 300,000,000 shares to a Belize entity doing business as Mid Americas Corp. in exchange for the option to acquire a partial ownership in a Chilean mining property.
Why is there a failure to disclose the individual that is associated with Mid Americas Corporation considering the fact that they own an overwhelming majority of SWVI.OB's shares outstanding?
Swingplane Ventures, Inc. was incorporated in the State of Nevada on June 24, 2010 with Matthew Diehl acting as the company's sole officer and director.
The company's original business plan was to operate as a men's and women's golf fashion manufacturer although there is very little evidence that any actual steps were made to execute the business plan.
This apparent lack of effort raises a lot of suspicion as to the real reasons why Matthew Diehl decided to take his company public and his checkered past experiences with public companies only exacerbates our uncertainty as to his real motives.
Perhaps most disturbing is the fact that Tapslide Inc. (OTC:TSLI), a public company which Matthew Diehl formerly acted as COO and Director, was suspended from trading on January 19, 2012 for a lack of current and accurate information.
Shortly after this incident, he was the sole officer and director of Swingplane Ventures and according to Swingplane's S-1 registration statement, the company's headquarters was listed as the personal residence of Matthew Diehl at 220 Summit Blvd. #402, Broomfield CO 80021.
One could imagine how difficult it would have been to operate a golf attire manufacturer in your own residential condominium but adding to this problem is the fact that Matthew Diehl also lived at this personal residence while being actively engaged in a number of other public companies:
PaperFree Medical Solutions Inc. (OTCPK:PFMS) is a public company that formerly employed Matthew Diehl as the Chief Executive Officer.
As you can see from the stock chart below, this past venture that Matthew Diehl was associated with failed to execute the business plan and currently the stock trades for $0.0002.
Matthew Diehl was also a former Officer & Director of the defunct public company Kushi Resources.
The image below highlights even more companies that Matthew Diehl has a history with, including TheraBiogen (OTC:TRABE).
Take note of the fact that Matthew Diehl lists Aaron Lamkin as a business associate that also appears to have been a former roommate at the 220 Summit Blvd. residence:
Part II covers a seedy relationship between Matthew Diehl and Aaron Lamkin in great detail but some pertinent information to know about Diehl's associate including the fact that on November 16, 2011 he was barred by the Securities and Exchange Commission and can no longer be associated by a registered broker or dealer.
The complaint by the Securities and Exchange Commission includes some information about Aaron Lamkin's unregistered distribution of shares in Xpention Genetics, Inc. and HS3 Technologies, Inc. (OTCPK:HSTH) whereby he solicited investors to buy shares in these companies, handled their money, and directed the transfer of shares.
Awesome Penny Stock's Past Performance
Every penny stock that is subject to a stock promotion by Awesome Penny Stocks eventually loses well over 90% of its value and Swingplane Ventures will be no different.
Below is a stock chart that visualizes the precipitous decline in price per share after Awesome Penny Stocks promoted World Moto Inc.:
Below is a stock chart that visualizes the precipitous decline in price per share after Awesome Penny Stocks promoted TagLikeMe Corp. (OTCPK:TAGG).
Below is a stock chart that visualizes the precipitous decline in price per share after Awesome Penny Stocks promoted Superior Venture (SVEN.OB).
Below is a stock chart that visualizes the precipitous decline in price per share after Awesome Penny Stocks promoted Great Wall Builders Ltd. (OTCPK:GWBU):
Below is a stock chart that visualizes the precipitous decline in price per share after Awesome Penny Stocks promoted Amwest Imaging Inc. (OTC:AMWI).
In our first investigative report, the Fraud Research Institute very accurately predicted an 85% decrease for shares of USA Graphite Inc. (OTCPK:USGT). In the report we stated, "whenever an unrelated third party shareholder foots a big cash budget to kick-off an investor awareness campaign, it should be an ongoing concern in the minds of investors.
This was the same argument made in our report on Echo Automotive Inc. (OTCPK:ECAU) prior to its 50% decline and it is precisely the argument we are making with Swingplane Ventures. An overwhelming majority of promoted stocks decline by 50-99% and therefore situations like Swingplane Ventures present excellent opportunities for short-biased traders to reap significant profits since these promoted stocks are almost guaranteed to eventually fail.
Disclosure: I am short OTCPK:SWVI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.