If you think the rebound from $0.75 in yesterday’s crash of North Springs Resources Corp (OTCBB: NSRS) was something to have faith in, beware because things the ride in the month-long hot penny stock are about to get very bumpy on the way down. Tuesday, $55 million in stock traded. $64.6 million yesterday, in a penny stock that just 4 months ago reported literally having pennies for cash, $16, in the bank and creatively made CEO Harry Lappa a multimillionaire having forward split NSRS to create hundreds of millions of personally owned shares.
The “skull and crossbones” image is featured on the NSRS page of OTCMarkets.com which states clearly:
“Buyer Beware: There is a public interest concern associated with the company, which may include a spam campaign, questionable stock promotion, known investigation of fraudulent activity committed by the company or insiders, regulatory suspensions, or disruptive corporate actions.”
This type of penny stock is for skilled traders and just like what happened 2 months ago with Amwest Imaging (AMWI) which dumped in literally 58 minutes is going to happen to NSRS. Maybe not today, but when it dumps the buyers will virtually disappear and a lot of new investors are going to be nothing more than bag holders.
Stock Snap Shot:
NSRS Float: 196 Million
NSRS traded as high as $1.71 in Yesterday’s trading session.
NSRS closing price for Wednesday, February 8, 2012 was $0.97, down -40.85% (-0.67).
NSRS traded volume of 64,770,696, almost equal, $64,641,155 in stock. (VWAP: 0.998)
Data provided by Capital IQ
NSRS YTD Chart:
NSRS CEO, Harry Lappa, has had chat rooms buzzing for months now. A former Canadian government official (Red Flag #1) manipulated his way to creating over half a billion shares of NSRS when he purchased the NSRS shell. As CEO of NSRS, Harry Lappa reportedly only pockets $10,000 per month ($9,984 more than last financial statements reported as Cash) to act as NSRS sole director, chief financial officer, secretary and treasurer.
In Summary: A one man band calling the shots.
A simple internet search of Harry Lappa’s corporate history indicates that the financier is a graduate of the University of Regina in Saskatchewan and worked as a financial officer for Immigration Canada from 1989 to 2003 before he moved into the penny stock world.
U.S. regulatory filings state Lappa was:
- Director of Iciena Ventures Inc. which was suspended from trading (Red Flag #2)on the TSX Venture Exchange in March 2011
- Director of Pennsylvania electronics recycler Endeavor Power Corp. (OTCBB: EDVP) in 2009 (Red Flag #3)
- CEO of Global Resource Energy, Inc. (OTC PINK: GBEN)(Red Flag #4)
- President and CEO of North Springs Resources (OTCBB: NSRS) in August, 2011 (Red Flag #5)
How Did He Do It?
- In March 2011, he acquired 2.5 million shares, 72.05% of a former shell called Aurum Resources Corp.
- In June 2011, Aurum changed its name to North Springs Resources and ensued with a 1:100 forward stock split.
- On October 31, the stock was split again, 2:1, raising shares outstanding to 696 million from 348 million.
In October, NSRS was trading under $0.05. North Springs has generated zero revenue since its inception in May 2009 and had only $16 in the bank on October 31, 2011, according to financial statements filed with the U.S. Securities & Exchange Commission. For the three months ended October 31, 2011, the company posted a net loss of $56,841 compared to a year earlier loss of $6,085.
On its website, North Springs bills itself as a mineral exploration company focused on discovering and advancing precious metal properties in Nevada. Besides the lack of cash, it is hard to see what’s in the portfolio to support the current stock price or any stock price really.