How disappointing to go fishing in a seemingly pristine mountain lake only to find that you’re treading muddy water and dead fish only five steps in. It seems a pristine facade is good enough for promoters pumping Clean Wind Energy Tower (OTC:CWET) stock.
The stock promoted by pumpers belongs to a development stage company. CWET is run by (and consists of) three guys who obviously see it fit to pay themselves $330 thousand investor money compensation for just Q1 of 2012, as reported in their latest 10-Q.
A quick look at financials may ease readers into the really good stuff:
- zero revenue since inception in 2010
- total current assets of $98 thousand
- net loss of $784 thousand for Q1 of 2012
Seeing such “stellar” figures could scare the more precarious investors. The best part about CWET however is their funding comes primarily from unregistered sales of equity securities through convertible notes. The thing is, CWET wants to make clean energy but all their convertible notes are toxic.[BANNER]
In 2011 the company issued an aggregate of $110 thousand in convertible notes. The purchasing party, a certain Asher Enterprises Inc., received the notes convertible at 52 to 69% discount from the lowest closing bid prices of the stock over the 10 days prior to conversion. This looks like a win-win situation for the note holder and a very sad story for shareholders.
Examining the 2012 chart of CWET, the February and early March severe slides in price may well be caused by Asher converting at insane discounts and dumping shares at the speed of sound. It looks like investors were left with a sub-dime stock on their hands and note holders laughed all the way to the bank.
The worst part is, CWET is still doing this in 2012, with their latest two filings describing the granting of notes to Asher and a JMJ Financial, with a collective principal sum of $320 thousand. The conversion of the notes is once again happening at a discount ranging from 30 to 42%.
CEO Ronald Pickett and CMO Robert Crabb also gifted a total of 7.95 million of shares to “various parties” in April 2012, further muddying the waters around CWET.
Despite the abundance of dreadful details about how this company performs and is being run, pumpers chose to only mention some obscure patent CWET supposedly got last week. Some people are willing to do pretty much anything for $13 thousand, which happens to be the budget managed by the pumpers.
Previously pumpers PennyStockRumors, one of the parties touting CWET, have granted their subscribers wonderful opportunities to lose some money in post-pump stock slides, as seen on the chart of HYSR.
Investors should decide for themselves which way to go with CWET and do their own due diligence, even if the downwind drift smells of something rotten.
