Massive Pump Kicks Off for Global Gaming Network, Inc. (GBGM) Stock
Shares of Global Gaming Network, Inc. (Pinksheets: GBGM) stock have jumped on considerable trading activity today. The Company first began actively trading on Friday the 8th moving up .12 to close at .31 on 2.6 million shares of volume. Today the stock has hit highs of .49 and has traded over 14 million shares heading into the afternoon session.
Besides the large number of newletters sending out alerts on the Company is there anything of substance to sustain this run? Let’s take a further look.
Recent News Announcements
Global Gaming only has one current news release from May 31, 2012. The release centered around a shareholder update by Stephen Kern, President and CEO and focused around the stock’s interest in the texting service Sports Alert which you can see here: http://www.sportsalert.com/.
The site does get some traffic, approximately 10k unique visits per month. While that it is nice, we are not sure it justifies a increase in the stock from .0007 to it’s current level. Let’s take a look at the financial statements that were filed with OTC Markets, as the Company is not an Edgar filer with the SEC.
Recent Financial Statement Highlights
One of the, ahem… “discrepancies” we keep seeing on the net is that GBGM is a “super low floater”. We have seen numbers of less than 2 million shares outstanding. According to the Company’s balance sheet submitted on May 11, 2012 they currently have 10,439,984 issued and outstanding. While this number is quite low for a penny stock it is way more then the numbers being tossed about.
How about the cash on hand amount? That checks in at a whopping $363.00. Phew!
There have been “0″ revenues generated to date and the operating expenses of Sports Alert check in at $2,128.00 for the quarter. This leaves us a little confused when the Company’s President references a goal to “Broaden the revenue base of the SportsAlert service with new co-marketing arrangements with popular fantasy sports and gaming websites.” in the shareholder letter.
The most interesting paragraph in the OTC Market filing is the following:
The Company on December, 10, 2011 entered into a Stock Purchase Agreement with Wilshire Capital Ltd. (“Wilshire”) whereby Wilshire has agreed to purchase for an aggregate subscription price of $200,000 a certain number of shares of common stock of the Company. The Shares shall be purchased in installments of not less than $10,000 (“Installments”) of Wilshire’s sole choosing at any time during a ninety (90) day period commencing on the date hereof and terminating on March 20, 2012 (“Conversion Period”). The Company and Wilshire agreed to extend the termination date to June 30, 2012. The price for the Shares, at each installment purchase and conversion, shall be equal to an amount of Shares calculated at a rate equal to 75% of the OTC market price of the Company’s Common Stock based on a 10 day trailing average of the lowest bid for the Company Common Stock (“Conversion Rate”) at the date of notice of purchase and conversion and the payment of the portion of the Subscription Price to Company.
The above explains the heavy activity, pretty sweet deal if you could purchase stock in blocks of 10k for a 25% discount to the market, and then sell into the increased activity.
The Bottom Line:
If you were one of the few lucky traders to get into this deal on Friday or prior to this morning’s gap then our hats off to you. For the rest of us we would proceed with extreme caution heading into the week. It wouldn’t surprise us to see that .0007 level again by July.