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After the merger back in February, For the Earth Corp (PINK:FTEC) has not been the most attractive company on the stock market. Over the next few months, many sessions did not have a single share traded, while others rarely exceeded 1000 for the day. Suddenly, 800k shares changed hands in a single session this May. What is more, the hype is likely to extend for a few more days since the catalyst is still in place. 

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Great potential, hotel chains buying – this is how it started. This was the company’s press release last Friday when the already mentioned 800k shares changed hands. The stock price, however, did not change much, the session closing at 0.16 per share. Since two paid promotional newsletters came last evening, it is expected that at least the trading frenzy would continue. On the other hand, it is possible that the more people look into this company, the less their excitement would be.

FTEC is a pink sheet, and although promoters describe it as an extraordinary one, it does share some similar features with the other pink sheets enterprises. Unaudited balance sheets for 2010 are one example. According to the one covering last year, as of Dec. 31st 2010 this company could show the following:

  • total current assets of $17k, cash of $2.8k;
  • total current liabilities of $556k;
  • sales of $181k;
  • net loss of $640k; [BANNER]

What is more, compared to 2009 the sales of the company are almost five times less in 2010. Naturally, on an yearly basis the net loss for 2010 is far greater than the previous year. Now, while this is not disastrous, it certainly brings out a red light for investors. Furthermore, there is the question about the motives of the third party that paid for the promotions yesterday.

Now, the bright side of things is that there are sales. The uncertain one – that FTEC releases news about increased sales, but there are no names mentioned, there are no figures. In this aspect, it really comes down to simple math, rather than how great a product is. Additionally, there is the issue with the interest in this stock. Obviously, when there are no promotions or press releases, it would be either no or very little trading activity on the market. So, for current shareholders additional promotions could be needed for them to be able to sell their shares.

All of the above combined, it is by no means a sign that this is a bad company doomed to fail. It is simply a sign for caution that should be applied. If, indeed, FTEC shows a better balance sheet and audited financials, then there would be no need for external catalysts to push the stock price up.