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Pump And Dump Spotlight - BRZG: Brazil Gold

|Includes: Brazil Gold Corp. (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- 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
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.