Stay Away From This Penny Stock!

| January 27, 2014 | 0 Comments

There’s no question that penny stocks can generate huge profits for savvy investors.  However, this area of the market also presents a unique risk in the form of penny stock promoters.

I’m talking about companies that issue “research” reports on penny stocks in exchange for cash or stock from the company or anonymous third parties.  If that sounds like a conflict of interest to you… that’s because it is.

In fact, many of these promotional campaigns are nothing more than thinly veiled pump and dump schemes.  If you don’t know how a pump and dump works, be sure to check out our free report that exposes the whole thing.

Today, we’re exposing one of the most extensive penny stock pump and dump campaigns of the past week:  Firstin Wireless Technology (OTCPINK: FINW).

Let’s take a closer look…

Firstin Wireless Technology (OTCPINK: FINW)

Our research shows that FINW is one of the most heavily hyped penny stocks of the past week.  According to our sources, 25 promoters have been paid over $80,000 to pump the stock through more than 45 newsletters.

And so far, the campaign is having some success.

Firstin Wireless Technology

As you can see, FINW has traded up from 20 cents earlier this month to a current price of 32 cents per share.  That’s a 60% gain in just a few weeks time. 

However, it’s hard to understand why the campaign is working well given the company’s recent change of business and poor financial condition.

According to the most recent annual report (January 2014), the company was formed in September 2010 under the name Passionate Pet, Inc.  From inception until January 2013, it operated as a retail pet supply store in Irvine, California.

The company discontinued the pet supply business after it was evicted from its building in January 2012.  And it disposed of this business entirely in July 2012 “primarily because it [had] incurred significant operating losses in each of the [prior] two years…”

Then in January 2013, the company entered into a share exchange agreement with Firstin Wireless Technology, Inc. and became a subsidiary of that company.

The company’s now trying to make a go of it as a provider of mobile wireless services.  They claim to offer affordable international long distance and roaming calls over their hybrid mobile VoIP technology for the same low price and sound quality of a local call.

But one look at their financials reveals the company has a lot of work to do.

For the fiscal year ending September 30, 2013, the company generated zero revenue while racking up a net loss of nearly $36,000.  It ended the year with current assets of $77,726 compared to current liabilities of $938,912.  And the company ended the year with a shareholder deficit of $819,805.

Not a pretty picture by any means.

In fact, the annual report states the following…

“In light of operating losses incurred in past years, negative cash flows, a negative working capital and a shareholder’s deficiency, there is significant doubt about the Company’s ability to continue as a going concern.”

Given the company’s shaky financial situation, it’s hard to understand why investors are risking their hard earned money on FINW.  It’s just a matter of time before the sellers take over and drive this stock into the ground.

You would do well to steer clear of FINW at this time. 

The company is just entering a new business, and it hasn’t generated any revenue from that business yet.  What’s more, it’s not clear the company will be able to continue as a going concern.

Profitably Yours,

Robert Morris 

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Category: Penny Stocks

About the Author ()

Robert Morris is the editor of Penny Stock All-Stars, an investment advisory focused on discovering small-cap and micro-cap stocks that are destined to become the market’s next Blue Chips. The Wall Street veteran and small-cap stock specialist is also a regular contributor to Penny Stock Research. Every week, Robert shares his thoughts with our readers on a variety of penny stock-related topics. In addition to Penny Stock Research, Robert also writes frequently for two other free financial e-letters, ETF Trading Research and the Dynamic Wealth Report. He’s also the editor of two highly successful and popular investment advisories, Biotech SuperTrader and China Stock Insider.

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