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A.J. Watkinson
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A.J cut his teeth while working for more than 12 years on the corporate side of the financial services industry in the suburbs of New York City. In addition, A.J. has successfully traded stocks, options and currencies as an independent trader since the late 90's. Eventually A.J. moved out of... More
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  • Pump And Dump Spotlight - BRZG: Brazil Gold 0 comments
    May 11, 2014 1:40 PM | about stocks: BRZG

    In the world of penny stocks, you're sure to find oodles of great, unknown companies to invest in. But there are also penny stock scams designed to bilk hard-earned cash from investors. And usually you'll know its hit you after you've watched your investment evaporate into thin air!

    We know what to look for, and tell you who's out there pumping stocks using paid promoters.

    It's our job to expose penny stock pump and dump scams…

    And we take real pleasure in putting the smackdown on the latest penny stock pump and dump scams.

    As you read, you'll see the big red flags we've come across on these companies. And with all the great penny stocks out there… there's no reason to put a single dime into any of these companies!

    This week, we're exposing a pump and dump scams on: Brazil Gold Corp. - OTCPK:BRZG

    It's looking like things have been going poorly at Brazil Gold. Their stock trades for a paltry $0.0027, and that's after a 55% single day drop! Why oh why do the pumpers think you need to buy this sub-penny stock? Well, for no other reason than "watch for momentum as we could be in for one CRAZY day!"

    Yep, that's all they've got to tell you. And to see how much they've been paid for that crap analysis… well, it's enough to turn your stomach upside down.

    Red Flag #1: Paid PUMP!

    Stock Mister was paid a staggering $250,000 for a single day's promotion!

    Here's the details from the disclaimer for you to read-

    StockMister.com has agreed to and expects to be compensated Two-Hundred and Fifty Thousand Dollars Cash via Bank Wire Transfer by a third party (Flip Ventures) for a 1 Day Marketing Program regarding BRZG.

    Of course they can't put the number in their email, you might actually see it if you were browsing the entire message.

    But the real concern you should have is about what you're buying when you purchase shares of this stock...

    Red Flag #2: Financial Trainwreck

    BRZG at least files with the SEC, which makes their reports readable and consistent. But there's not much else good to report about the company's finances.

    Here's their numbers as of December 31, 2013...

    • $659 in cash on hand
    • $1.1 million in current liabilities & - but $1.6 million in total liabilities
    • $335 k loss for just the last quarter of 2013 - on $0 revenue

    No revenue, a huge loss, lots of liabilities, and $659 in cash in the bank. I'm pretty sure you have more in the bank. Ready to buy shares yet? I hope not!

    But wait, there's more...

    Red Flag #3: Name Change

    The directors of this company, who by the way own over 68% of the shares, collectively decided that the gold business in Brazil isn't all that booming (as you can clearly see above). So instead, they decided to change direction and get into the livestock business as Conexus Corp. They're going to focus on the cattle business. Great for them.

    But what kind of success should we expect to see from this company down the road? If you're judging from how well they did in the gold business, I'd say their chances are slim for success!

    More On The Stock Holders

    But if you want to know who's behind this company, and how many shares they hold- here's the goods which I pulled straight from their 10-Q:

          Shares of Common Stock
    Beneficially Owned
     
    Name Age Positions held with Brazil Gold Number of
    Shares
      Percent
    of Class
     
               
    Stephen J. Price 54 Chief Executive Officer and Director  391,658,891(1)  32.5%
                 
    Gerard Daignault 55 Chief Financial Officer and Director  391,658,891(1)  32.5%
                 
    Conrad Huss 65 Director  36,000,000   3.0%
                 
    Adirondack Partners LLC (3) - -  8,424,886(2)  9.9%
                 
    ASC Recap LLC (4) - -  8,424,886(2)  9.9%
                 
    All directors and executive officers as a group (3 persons)      819,317,782   68.0%

    The scary part is, both the CEO and CFO each hold stock that's worth $1.05 million each. Seeing that BRZG lost over 55% in the last trading session- you can bet they're not all that happy… at least I wouldn't be.

    That is unless of course they dumped some shares on unsuspecting folks reading that email from good ol' Stock Mister. I'm not saying they did, but we can be sure the company who paid Stock Mister $250K, Flip Ventures, was planning on doing just that!

    Are you holding shares right now? Let's hope not… who knows what'll happen next with a sub-penny stock like this!

    The Wrap Up:

    Too many investors get sucked into these nightmare penny stocks scams. They fall for the overly optimistic projections the paid promoters are selling. In the search of easy money, investors lose sight of what a real return should be… and end up holding the bag.

    When investing in pumped penny stocks, it's the ultimate case of "let the buyer beware!"

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: BRZG
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