An endorsement for a penny stock is like a winning lottery ticket most of the time, especially if it comes from an influential third party. On Thursday, Daytona International Speedway announced a new partnership with Green Earth Technologies, Inc. (OTC: GETG), naming the makers of G-OIL, the first bio-based full synthetic oil used in NASCAR competition, as the “Official Motor Oil” of Daytona International Speedway and the Daytona 500. The influence was strong enough to push GETG stock up a whole 12.97% on 559,600 shares traded, a sad result for a “real deal” Company with a solid “real” product. Why is that?
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GETG Stock Chart
Market Cap: 39.69M
Last: 0.2560 ▼ -0.014 (-5.19%)
Dollar Volume: $98,961
Issued and Outstanding: 155,030,705
14-Day Rel Strength: 64.45%
14-Day Stochastic: 59.22%
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NASCAR, founded by Bill France, Sr. in 1947, is 2nd only to the NFL amongst professional sports franchises in terms of television ratings in the U.S. Furthermore to that, NASCAR’s headquarters are located in Daytona Beach, Florida, host of the upcoming Daytona 500, “The Great American Race,” this February 24. For Green Earth Technologies to get the sticker of approval from these guys is better than anything an oil company could ever ask for.
Green Earth Technologies is so much more than just a motor oil maker designed to reduce the “carbon footprint” left by other non-environmentally friendly lubricants. What’s happening behind the scenes though is not as peachy though. Investors were recently asked to approve an increase in authorized shares for the Company from 300 million to 500 million on their most recent proxy material issued. The increase in authorized shares was aggressively shot down by shareholders.
Reason being is that, although sales are surpassing 2011 numbers, the Company received $6,250,000 from the sale of of 6.0% Secured Convertible Debentures, issued to eight accredited investors, due December 31, 2014. Another $3,860,294 could come in to Green Earth Technologies if all of the Warrants, priced between 0.17 and 0.21, are exercised.
Just last week when the news announcement was made about the Daytona 500 endorsement, the Company filed an amended S-1/A which is set to convert a portion of those convertible debentures to as much as 55,147,059 shares of GETG stock, about 30% of the issued and outstanding from November 14.
There is no question as the the trueness behind the PR issued last week (see here) or the revenue producing model Green Earth Technologies has in place having booked over $2 in net sales for the three months ended September 30, 2012. What is an issue, although it is getting better, is the inability to produce net income as of yet. With the endorsement by Daytona International Speedway and the winter slowly turning into spring, the opportunities for product sales to expand is the best bet for investors to bank on with GETG.
About GETG Stock
Green Earth Technologies, Inc. creates, develops, markets, sells and distributes an array of G-branded, environmentally-friendly, bio-based performance and cleaning products to the automotive aftermarket, outdoor power equipment, well service and marine markets, which includes automobiles, lawn mowers, power washers, chain saws, leaf blowers, hedge trimmers and boats. Click here to view the SEC filings for GETG.
Last 5 Trading Sessions:
Bottom Line: Until the debt ceiling for GETG lowers itself to a level whereas the Company can start to turn some positive EBITDA, it will likely be one of the penny stocks you wish could just accelerate. However, with a strong product and a brand marketing awareness solidified to the consumer market most likely to purchase the Company’s products, GETG stock stands a good chance of staying on the long-term radar screens for short-term blips.
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