Nearly a million shares traded in the last two trading sessions of August on the penny stock of 3Power Energy Group (PSPW), almost equal to the entire month. The Chairman of the alternative energy supplier, Mohammed Falaknaz, issued a letter to shareholders, and interested parties, to start the last week of August with updates on achievements made in the Albanian market. With the positive news, why the volume surges and price drop in PSPW stock to end the month?
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PSPW Stock Chart
Market Cap: 19.05M
Close: 0.1684, down -0.0516 (-23.45%)
Volume: 564,237
Dollar Volume: $89,974
High: 0.22
Low: 0.14 (New 52 Week Low)
Trades: 81
Average Trade Size: 6,965
Authorized: 300,000,000
Issued and Outstanding: 113,096,380
Thursday, August 30, was the largest share volume session of the year, 373,845, until Friday nearly doubled that. With the volume surge to end the month, PSPW stock dropped just over -50% in two days.
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With a quick look at the 10-Q for the three months ended June 30, 2012 filed on August 20th, revenues came it at “a donut”, $0, compared to $476,701 for the same three month period in 2011. Ouch! At least they aren’t totally taking the piss since G&A expenses dropped roughly2/3 to $469,189 from $1,442,783 for the same period last year when they were actually booking top line numbers.
Hoping to establish a leading position in the Balkan countries niche market of Electric Hydro Power plants, Falaknaz points out in the newsletter that 3Power Energy is close to completing acquisitions totaling 300Mwt in concessions out of the 500Mwt planned for this year with similar progress happening in Bulgaria. The Albanian project is set to allow the Company to receive a percentage of the planned 127,6 MW hydropower plant cascade on the Shala River in the northern part of Albania, The plant is estimated to have the capability of producing on average 530.35 million KW/year.
The highlight of the newsletter comes on the last page under the FAQ section where it states: Shouldn’t we see the impact of this on the company stocks and liquidity? The response: The company will be launching soon an intensive PR and IR campaign. Perhaps that’s the reason for the sudden activity to end August.
What PSPW is Banking on
On June 5, 2012, 3Power Energy Group and Shala Energy executed a master acquisition agreement whereby the Company agreed to acquire 75% of the equity of Shala upon the Company’s payment of the first year premium for the insurance bond premium issued in favor of the Ministry of Economy, Trade and Energy of the Republic of Albania for the Shala River Concession Agreement, €7,230,315.
On August 10, 2012, after the conclusion of the due diligence efforts, the Company made the first year payment of Required Insurance Bond Premium in amount of €164,851, and as such the Acquisition closed.
About PSPW Stock
3Power Energy Group Inc. is focused on producing renewable generated electrical power and other alternative energies. The Company’s primary efforts are to sell electricity generated by solar, wind, hydro, biomass and other renewable energy resources and to develop, build and operate power plants based on these technologies. The core approach of the Company’s business is to deliver energy in markets where there is an inherent energy gap between supply and demand or where there exists long term, stable, government back by financial support for development of renewable energy.
As of June 30, 2012, 3Power Energy had only one project, a 19.5 mega watt Chilean wind farm project.
Click here to view the SEC filings for PSPW.
Bottom Line: The volume and sudden price drop of PSPW forces traders to add it to the list of penny stocks to watch. Insha’Allah, the Shala deal will produce the revenues needed and make owning PSPW stock worth the risk, Insha’Allah.
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