Don’t Mess Around With This Bullfrog
Bullfrog Gold Corp. (OTCQB: BFGC) is a junior wannabe gold miner. I say “wannabe” because the company is merely in the exploration stage of the business. It doesn’t produce any gold, silver, or other metals at this time.
In fact, the company hasn’t generated a penny of revenue in its six year history.
But that hasn’t stopped penny stock promoters from plugging the stock. Over the past week, BFGC has been one of the most heavily hyped penny stocks on the market.
According to my sources, no less than 12 promoters with 31 newsletters have been paid more than $130,000 to pump the stock so far this month.
That’s a huge red flag by itself. But if you need another reason not to buy these shares, just take a look at management’s misguided priorities.
As you might expect, Bullfrog’s spending a ton of money in its quest to hit the mother lode. Over the first six months of 2013, Bullfrog has spent $463,000 on exploration activities. That’s on top of last year’s exploration costs of $967,323.
Funny thing is…
The spending on exploration (which should be a gold explorer’s main activity) is nothing compared to what this company spends on marketing.
Last year, Bullfrog spent nearly $1.3 million on marketing activities. And through the first six months of 2013, the company has already spent close to $1.2 million on marketing.
In other words, Bullfrog’s marketing spend over the past 18 months is 79% higher than what it has spent on its search for gold.
What’s worse, management’s decision making is producing hefty losses.
In 2011, Bullfrog racked up a net loss of over $2.2 million. Last year, the company rewarded shareholders with a net loss of $1.3 million. And through the first six months of 2013, Bullfrog has produced a net loss of $331,313.
But despite this sorry track record, BFGC was somehow trading for $0.32 per share on October 4th. At that price, the company had a market cap of over $14 million.
The really interesting thing though is what happened to the stock once the penny stock promotion campaign got underway last week.
Take a look at the following chart…
As you can see, the bottom literally dropped out of the share price. The stock opened at $0.35 on October 7th (the long blue bar), however that proved to be the high not only for the day, but for the entire week.
At the moment, BFGC is changing hands at $0.18 per share, a whopping 49% below Monday’s high.
This is a perfect example of what can happen if you follow the advice of penny stock promoters. There’s no question a good number of investors who bought BFGC at the urging of a promoter have now lost a lot of cash.
Don’t make the same mistake with your own hard earned money. Stay away from promoted penny stocks like BFGC.
Profitably Yours,
Robert Morris
Category: Penny Stocks
