the OTC .today

Monday, March 5, 2012
Today's PUMPs & dumpS

An IRYS-ponsible Investment
Blue Gold Puts Investors In The Red

The current belle of the ball, at least until releases its new “pick”, that it will be paid to “pick”, is Itrackr Systems, Inc. (IRYS).  Already starting out as a carefully executed Pump & Dump, IRYS insiders are carefully diluting the float, in organized fashion, rather than just whacking bids. Adding a little cache to the scheme, famed shorter, and probably the Penny Stocks’ most subscribed-for-fees guru, Timothy Sykes, has joined the legion of pimps, having been admittedly paid $50,000 for recommending IRYS to his unsuspecting cheering section. This is the first time we can recall Sykes becoming a paid endorser, but that's probably a result of our senior memories. 

IRYS looks to be set-up to make its insiders millions, as the base of the pyramid is still being built with a seemingly strong, albeit temporarily, foundation. As the insiders and those who participated in private offerings are currently the only sellers of significance, that is not a difficult task. You see, prior to the beginning of this P&D, the street held very few shares of IRYS stock. And by few, we calculate about 100K – 200K shares that were held by the public as little as a week ago. Soon, the public will own a whole bunch, all the while lining the pockets of those who have waited for pay day for about two years.

As of today’s opening, IRYS boasts a market cap of $21 million, a little strange since the latest financials (the annuals are now overdue, surprise, surprise) showed the most ever quarterly revenues at almost $232K. Unfortunately, all those revenues did was precipitate a net loss of $205K for the quarter and $461K for the first nine months of the fiscal year. Now the company is down to its last $44K in cash and yet owes $1.6 million.

We don’t expect things to get any better very quickly, as it took several years for the company to get to the point where it was generating these kind of meager revenues. There is certainly nothing here to justify its current market cap, which we expect will get larger before it inevitably and tragically comes crashing down. We parallel this Pump & Dump campaign to Raystream Inc. (RAYS), which was subjected to somewhat of a buying frenzy courtesy of many of the same touts involved in the IRYS scheme. RAYS, had three impressive, yet progressively shorter runs, each of which was followed by a crash in share price and then came the end of the scheme resulted in losses for some of 85% and mounting. IRYS will ultimately find its more reasonable market cap as well, but not before enabling insiders to cash out.

There are fresh shares of Blue Gold Beverages (BGBV) for sale, as the first P&D campaign since last December gets under way. As buyers in that campaign currently enjoy 75% losses, we expect this new campaign to be the last one before a reverse split is effected. The story is pretty much the same as we told last December as cash assets are depleted and losses mount. One thing that does perplex us is that net revenues for the year, gleaned from the financials which were just reported, are significantly less than the net revenues for the previous quarter. How is that even possible? As net revenues are exclusive of operating expenses, the only thing we can rationalize is that the company experienced massive returns from its customers, certainly not a good omen for its business. Either that, or the accounts ran out of fingers while cooking the books.
At any rate, with now 700 bucks in the bank, $2.2 million in debt and annual losses reported at $457K, its hard to imagine how this company is worth its current $1.1 million valuation. We think that massive bid whacking will accompany any buy orders that today’s P&D campaign will generate as BGBV appears to be insolvent.

Click here to view our previous alert on BGBV and you will see how spot on we were back then.