Thursday, July 8, 2010

Scama-Jamma: Amarok Resources (AMOK)

I love it. We first met this one in last month's "SEC Approves Eight Russian Shell Companies (AMOK.OB)":
Better Get The Leg Irons Boys.
These Ain't Regular Criminals,
These is Stockbrokers.
-One of Climateer's favorite Barron's headlines.

Oh happy day.
Long time readers know I have a morbid fascination* with the underbelly of the markets; it's like watching the lions approach the wildebeest at the watering hole, you don't want to see it but you can't look away.

As they say on the nature shows:
"Sadly now, there can be but one outcome"

From the Wall Street Journal:
The SEC's Russian Roulette
IPOs From Ukraine and Russia Were Cleared, With Few Questions Asked...
Now Tim Bovee, Private Trader analyzes it as if it were a real deal, I'm guessing somewhat tongue-in-cheek:
Today's over-the-counter email catch includes Amarok Resources Inc. (AMOK), a gold and silver mining company based in Nevada.

In the email, an analyst named Eric Dany, claims chaos may produce $8,000 an ounce gold, amidst the rampaging Four Horsemen of the Goldbug: Economic Collapse, Debt Growth, War/Terrorism and Environmental Disaster.

Even the ticker symbol has an apocalyptic feel. "Lord AMOK raised his sword and smote the non-believers."

AMOK $1.20

He continues that all this badness is a chance to make 2,500% to 7,500% in profits.

Much as I hate to look an apocalyptic gift horse in the mouth, as a fact-based trader I can do none other.

AMOK has not been a strongly trending stock as late, and that accounts for the discrepancy in signals: Bullish psar, bearish Person's Proprietary Signal (pps), bullish but declining macd, neutral fast stochastic. And a fair low and declining average directional index. If this is a take-off stock, it has not yet begun its meteoric ascent. In fact, in trading yesterday (and so far today), the open and close are identical.

One important fact about AMOK is that it is illiquid, with volume generally under 300,000 shares (and some days below 50,000 shares). It's easy to get in, but it may not be easy to get out, should Mr. Dany's scenario fail to play out.

A second is that AMOK hit its peak in April at $2.75, and has since lost half of its value on declining volume. It's not a stock on the move as yet.

AMOK's most recent quarterly financials show it spent $865,916 and had revenue, from interest, of $296. That's a loss of $865,620.

A company news release, dated April 14, says it has selected a drilling contractor for its property at Carlin, Nevada....MORE