It is not stupidity that parts you from you money, it is more often than not lack of attention to detail, coupled with emotions prevailing over rational thinking. Of course, it is hard, especially when the company at hand is the most traded one on the OTC under $1 yesterday. Today`s story is about Writers` Group Film Corp.(PINK:WRIT) – a solid example of why you have to pay close attention to detail when you deal with penny stocks. 
“WRIT is exactly what we thought it was, an absolute animal itching to break out of its cage!” – this is how the promotion from yesterday starts. Well, this is how it should start, as the third party paid half a million for it. There is no way to have started with facts like – WRIT is exactly what we thought it was, a company with $50 in cash, no operations and horrible financial statements.
Long story short, this well-paid promotion managed to create such a trading frenzy that not only did the stock double in price to $0.08, but the trading volume exceeded 100 million – more than any other penny stock company. Yet, before you start day dreaming, it is perhaps wise to consider some other facts which somehow usually slip the promoter`s mind. [BANNER]
This is a company with no operations, $50 in cash, actually this amount represents the total current assets of the company. There are, however, $5.1 million of accumulated deficit, which is why you can read the following in the latest 10-Q statement: “These factors raise substantial doubt regarding the company`s ability to continue as a going concern; it is unlikely to generate earnings in the immediate or foreseeable future.” Again, attention to detail is what matters!
By the way, if you are to invest $500k in a company, you would expect to get more in the near future, right? By the same token, when a third party puts $500k in a promotion, it is also natural that someone is expecting to get more than $500k in return. One question that should come to mind is – what is the most likely way to get a good return on that investment. What will probably happen when the promotion is over?
On the other hand, the good news is the latest addition to the management of Writers` Group – a man obviously quite successful with mp3.com in the past. What he can do with this company is yet to see, but in the meantime there might be some more opportunities for profits as the promotion will continue throughout March.
Nevertheless, there is risk involved, which even the necessary due diligence might not help to evaluate. The uncertainty that surrounds this company, coupled with fear in forums about possible pump&dump schemes, should not go overlooked.
