One after another, with compensation or without, promotions keep on coming for Amerigo Energy,Inc.(OTC:AGOE). They build the story on two main points – the upcoming LOI for the possible acquisition or merger, and the hype that this future event creates currently on the stock market. The reality at hand, however, could seem a bit different, once a thorough research is done on the company and the recent events associated with it. 
It is a fact – this stock is moving up both in terms of share price and volume. On the 7th, when the first company announcement on the subject came out, the share price was $0.12, while yesterday`s session closed at $0.39, which is a huge jump for such a short period. Nevertheless, it is debatable whether the above could have been achieved without the several paid promotions that came out in the last ten days.Â
Now, while Amerigo announces that two potential partners for merger or acquisition are found, and the company is doing the due diligence on them, it might be a good idea for the regular trader to do exactly the same – take a closer look at this company in order to assess its value as a potential investment. There are several aspects here that should not go overlooked. The financials for one, the last SEC filings covering the first three quarters of 2010, indicate the following:
- total current assets of $99k, $304 in cash;
- total current liabilities of $536k;
- accumulated deficit of $27 million;
- net loss of $1.9 million;
Furthermore, again according to the same 10-Q prior to 2008 when Amerigo adopted its current name and line of business, the company has been engaged in a variety of other businesses, none of which were successful. This is the past. Fast forward to present days. [BANNER]
The last announcement from Amerigo. It starts with “due to the dismal performance from the company`s oil and gas properties…”. In other words, the latest business venture is also not so different from the previous ones, in terms of stability and growth. Â The company CEO, on the other hand, assures that no recapitalization or a reverse split would take place, and dilution would be kept to minimum. It is yet to see how this would be achieved, given the financial state of Amerigo.
The good news here is that this stock is finally enjoying some attention. After months of daily trading volumes between 100 and 10 thousand, Amerigo now enjoys hundreds of thousands of its shares changing hands daily. Coupled with this solid increase in the stock price, there might be an opportunity to get a good return on the investment in just a short period of time.Â
As for the future, it is one of uncertainty. Next Thursday, the company should provide additional updates on the current situation with the upcoming merger or acquisition.
