Far East Wind Power Corp (OTC:FEWP) has been picking up more volume, being in consolidation and building up tension in the light of the recent letter of intent. Consequently, the stock price changes have become as speculative as ever.The public company with no assets is determined to build wind farms in China’s Heilongjiang Province, but all they have done up to this point was signing a few letters of intent. Though these are not actual contracts, the acceptance on the market is remarkable – the stock price seized declining with the several latest letters of promises.[BANNER]
It’s been a long way down for FEWP. The downtrend of the share price is dragging from early 2010 when the company was listed with a new symbol. Despite the current consolidation with large percentage price swings, the stock is still risky as none of the recently announced LOIs was followed by a final agreement.
Furthermore, July 24, 2010 was the date on which the letter of intent between FEPW, Heilongjiang Defeng Investment Co., Ltd. and Heilongjiang Ruihao Technology Group Co., Ltd. should have been followed by a material agreement. No documents were filed to confirm that the agreement was actually made.
Another reason for why investing in this stock on the long-term is not yet advisable is their financial position – no income, no cash, no assets at all. Intentions to acquire other companies or involve in actual projects will require capital, which will be raised through the sale of additional stock or through dilution imposing debt instruments, like convertible promissory notes.
