By the looks of a 3 year chart on IMGG, you would think that they cured a disease or struck oil.  Not the case.

Imaging 3 (imgg) Stock Chart

IMGG is a stock that has had a very rapid run as of late.  The company offers 3d imaging technology, but the stock is acting like a typical pump and dump.  When reviewing a pump and dump, you need to read any press with a grain of salt.  One of the easiest things for a company, whose stock is being hyped or promoted, to say is that they are a development stage company.  When that is said… hands are off.  That would explain the lack of revenue and the lack of revenue in the bank.

Deeper digging will give you the facts.  The following is from Tim Sykes (TimAlerts.com) on 9/24/2009

Imaging3, Inc. (IMGG) is another pump & dump, promoted by the same scoundrels as behind GVBP…10 cents to 70 cents/share so far, many people ask, why not just buy these? Because I’m not good at it, I don’t sleep well when I do and these things can fall out of bed quicker than I can send an alert so it’s not worth the risk….much easier to short when they show signs of cracking…sometimes short even down to 0 like GVBP…this one will be nice, but I hope it gets above $1 first to give it more downside.

IMGG did not crack $1.  Not even close.  It reached $0.70.  I shorted at $0.67 and took a small gain covering at $0.52.  The downtrend is continuing and the event that they were hyping on 9/30/09 appears to have been a non-event.

The biggest tells here are with the promoter behind the stock and snapshot of the company.   Read any news on this company with this thought.  ”Enough to string you along believing it could be real”.

When trading in this arena, you have to be a cynic.

I will continue to watch the stock of GAEC, but as of today, I am out. I covered my 2555 shares @ $0.40 per share. The whole trade was odd. I shorted with a limit of $0.50 only to get a price of $0.55. I was pleased at the price on my short, but this reeked of “painting the tape”. When attempting to cover the trade over the past few days, I found that I could not get a bid or ask on this. In most cases you can find a quote for an OTC stock at PinkSheets.com. In fact, your broker probably uses Pinksheets.com. Take a look at what comes up for Gulf Alternative at the site:

GAEC at PinkSheets.com

You can’t find a quote.  My hunch is that the market maker is a bit too cozy with this company.   Pure speculation.  From everything that I read about the company, there isn’t much there as far as operations or technology.  I am not sure what turned up after the 2 week halt by the SEC.

This company is too small to be on the radar of investors or the SEC, but there is enough of a market (created by promoters) to allow the folks that own the company to continue to sell shares and pay their salaries.   The company has virtually no revenue and stated in the quarterly report that the funds to operate and pay salaries are generated by selling shares.

From the quarterly:

We do not have enough cash to satisfy our capital requirements for the next twelve months and we rely on shareholder loans and sales of common stock to pay our operating and research and development expenses.

B. Management’s Discussion and Analysis of Financial Condition and Results of Operation

We currently have few assets and no income. We are continuing to develop our cellulosic ethanol feedstock manufacturing facilities.

I have another short order out there now.  I’ll post if it goes off, but I don’t expect this company to be much more than a trading vehicle for the insiders.

Shorted 250 shares of PTEC at $2.32.  Not going to get rich with a small trade like this, but shorting isn’t my favorite activity.  The track record of the newsletter recommending the company as a potential short has been terrific (www.timalerts.com)

I had a correspondance with Tim Sykes about a year ago about a short candidate. Take a look at the current share price of the stock recommended by Tim.

REFR is interesting because it seems as though their technology could actually be somewhat of a breakthrough. I’d buy it if it breaks it highs, but I don’t like shorting companies with big potential.

I prefer shorting companies like YTBL, a company without any financials or revenues, constant losses, and a massive PR campaign designed to increase the stock price.

REFR was the company that I was asking Tim about.  YTBL was the company suggested by Tim.  Can’t find YTBL?  It is on the pink sheets now. The Symbol is YTBLA.OB.  Current price $0.18.  Price when recommended as a short candidate by Tim?  Around $6.00.