Death Portfolio Stock: Great Wall (GWBU), a “Pump and Dump”

Roll a dog turd in sugar doesn’t make it a donut–Chicago Slim

Invert, always Invert

Carl Gustav Jacob Jacobi was a German mathematician who lived in the 1800s. Jacobi once said “man muss immer umkehren” which translates to “Invert, always invert.” Jacobi believed that the solution for many difficult problems in mathematics could be found if the problems were expressed in the inverse. — (recommended)

This is a lesson in reverse search or what to avoid, though I am seeking shares (GWBU) to short. We will study:

Penny Stocks/Microcap Fraud

In the U.S., shares trading for less than one dollar are known as microcap or penny stocks.  Their low valuation and low trading volumes make them susceptible to price manipulation schemes.  Penny stocks also lack transparency in their underlying business and operations and often do not have a verifiable financial history, making them susceptible to securities fraud schemes.

First Case Study: SNPK

Our first case study in early March 2012 on Pump and Dumps (Frauds) was SNPK, last mentioned here

I call these types of promotions, “Death Stocks” because their stock charts eventually look like this (Note the flat line, similar to the chart of vital signs of a dying/dead patient:

Second Case Study: GWBU

Current Stock Price as of June 5, 2012: $1.75. 360 million outstanding shares at $1.75 = $630 million market cap.  Tangible Net Worth ($70,500). Price above value??? More than $600 million for negative net worth. No revenues.  Mr. Daniele Brazzi is both the CEO and CFO. Located in Baloney, Italy.  This company and all its affiliates exist for one purpose only–to sell pumped up stock to the unsuspecting, greedy and ignorant.

Now GWBU is in the early stages of a Pump. Ultimate Value—IMHO–within 22 months $0.00, where the stock will find excellent “technical” support.

A detailed (38 pages) tutorial on the GWBU Pump and Dump with current financial statements are here:Great Wall GWBU Pump and Dump  The Horror! The document is almost comical, but this stock is a DEATH STOCK.

Investigators closing in?

But where are the Feds? The SEC? Here they are:

Updates to follow………….


17 responses to “Death Portfolio Stock: Great Wall (GWBU), a “Pump and Dump”

  1. John,

    Shorting dog turds: looks like you’ve found your niche!

    May your rewards be many and generous…

  2. I have not shorted before (ok maybe just twice on some large UK banks in 2008). How can one actually short a penny stock. Can you just place a short order in Ameritrade? How large of a short position can one obtain with the pennies? Thanks…

    • Sure but Ameritrade has to have the shares for you to short. Hopefully one of their clients has bought shares. These are tough to find shares to short–no wonder they are at silly valuations.

      Short a targeted amount but be ready to see the stock go up 3 or 4 times since anything can happen.

      • John,

        And, be prepared to pay absurd margin interest for the privelege, which could, depending on the case, make it a bad risk vs. payoff situation even if you were proved right.

  3. John,
    You just really, really wowed me with this one. Even with a multiple of revenue you reach a value of 0 🙂

    Did you receive a “pump” email yourself?

    What website should I register to get spam mail with such great short ideas?

  4. John,
    Have you looked into CALL? That one is quite a case study.
    Thanks for the great content!

    • All these Pumps are absurd, but GWBU was chosen for its negative net worth–nice touch to promote a negative. SNPK had a death spiral convertible. I like the ones where there are multiple ways to lose moneyne enough to buy).

      WHY is CALL so interesting SPECIFICALLY. Provide details if you can.

  5. Hey John,

    Is it really that hard to get shares to short in this companies? can the broker ask for a larger commission on shares that are rare like this one?

  6. Shares can be impossible to obtain in the early part of the promotion since the shares are controlled or promoted higher. As the promote wears on shares leak out as individuals buy shares. Ironically, the shares can be easier to find in the later stages of the promotion. if you are willing to short 50,000 worth, the broker can do a search for shares, but use common sense. Part of this case is for learning. I have occassionally been able to find shares, but not all the time.

  7. This is really brilliant, it’s great to know the people on the other side of the trade when you short this are so gullible. Just take a look at some of the posts here:

    A little funny actually 🙂

    • arden,

      In these situations, you’re dealing with Vegas gamblers and you’re the house, essentially. If they play long enough, they’ll lose all their money, and you’ll collect it.

  8. Dear valued subscribers,

    GWBU retraced today after rising over 150% in the last few weeks. We believe these prices to be very low for a company that holds the potential to generate over $200M. in revenue in the coming years!

    Just in the last few weeks alone, GWBU made massive announcements that could translate into a higher valuation for the company.

    To recap, the company announced on:

    – May 18th a distribution contract worth almost $50M. USD for the FEED unit in Europe.

    – May 21st another distribution contract in France worth over $60M. USD for the FEED unit again.

    – May 31st a distribution agreement for Poland worth over $3.5M. USD

    – June 5th GWBU announced that they are finalizing a contract with Coopsette Soc Coop For Distribution of Start FEED Units that could worth over $125M. USD.

    In total, we are talking over $200M. USD in potential revenue in the coming years for GWBU. If achieved, GWBU could be valued at well over $4.00 per shares!

    As our members know, we are

    100% confident

    in GWBU and believe the best has yet to come! Members who didn’t have a chance to look at this company yet should strongly consider GWBU before it starts running again!

    The market is strong again with the Dow Jones gaining over 2% today alone. We believe the continued uptrend in the market could lift GWBU to new highs in the short-term.

    Don’t be surprise to see GWBU start another uptrend very soon. As many of you know, patience is key with our picks and we believe GWBU will be another one of our huge winners especially when we consider all the amazing announcements they have made so far.

    Our last picks soared between 500 to 800% in gains and we are 100% confident that GWBU is our next BIG winner for this summer!

    The InsidersLabTeam

  9. this is great stuff – unfortunately there is zero borrow and indications are IF shares come available the rate is about 60% – thats a tough game to play!

    • Yes, I know. If one could short shares freely, these promotes would not hurt as many people. I won’t be posting many of these again. OCCASIONALLY shares do become available especially if you have an account with one of the big public brokerages like Ameritrade that has many stock specs.

      But the purpose was to show how ignorant people are who purchase these stocks. A lesson in price from value and human psychology.

      Better to find special situation to keep you out of trouble while you sit on your compounding machines–FAST, HD, etc.

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