Covered GAEC
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.
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