A lot of the companies publicly traded on the OTC start out high only to drop to the triple zeros. At this point, Hondo Minerals Corporation (OTC:HMNC) has been moving in the opposite direction.
HMNC started moving slowly up back in mid March. In the last few sessions, however, the gains have been more substantial, and so have been the trading volumes. Yesterday, the price increased by 12.97% to the new high at $2.70 on approximately 368 thousand shares.
The attention HMNC is getting these days can easily be explained by the paid promotions. According to the disclosures of the newsletters, the aggregate compensation is somewhere between $50 thousand and $100 thousand. This is a respectable sum and it seems the campaigns have been successful in raising the awareness of traders as the volume generation coincides with the start of the promotions.[BANNER]
Additionally, the company has released numerous announcements about its plans and their development. If the information in the PRs is accurate, the company should be on the verge of starting to generate revenues. However, apart from the publications of the company, there is little to confirm the claims.
The latest available 10-Q is for the period ended Jan. 31, 2011. At the time the company was in the exploration stage and had no revenues, $270 in cash and land and mining properties worth $7 thousand.
At that time the company was actually called Tycore Ventures Inc., it changed its name after it had acquired Hondo over a share exchange. The name change happened on Mar. 8, and so did a “5:1 stock dividend”. In effect, that was a split which brought the OS from 6.8 million to 34.3 million. On Mar. 14, 16.8 million shares were “cancelled by certain shareholders…”, which would bring the OS to 17.5 million assuming there were no other events that would affect the number.
HMNC is still a relative newcomer on the market and not too much is known for certain at this time. What is evident is that the company has some appeal to traders. If the information provided by the company is accurate and correct, HMNC has great potential for growth and profits. Investors should still keep in mind that the company will need funding to proceed with its plans, and at this point such funding will most probably come from the sale of stocks, which would mean dilution for the current shareholders.
