The stock price of First Colombia Gold Corp (OTCMKTS:FCGD) witnessed probably the worst performance in last year. It started the year on the same note declining sharply on the charts in recent months. The downfall is not surprising considering the various red flags associated with the company. The first thing anyone can do it to track the financial performance of the company.
The company latest financial report states that First Colombia had cash of $49,000. It reported $84,000 in current assets and $2.3 million in current liabilities. The quarterly revenue was $1,739, and operating loss came at $4.3 million. The huge liabilities and miserable revenue are the big red flags in the balance sheet. Moreover, the operating expenses have surged from $303,858 in the first three-quarters ended September 30, 2013 to $5.37 million due to increased management compensation.
Last year in April, First Colombia Gold Corp (OTCMKTS:FCGD) opted for a massive one for hundred reverse split and reduced the outstanding shares to approximately 1 million. By October 19, 2014 the number surged to almost 405 million. The company increased total authorized share count to 10 billion from 4 billion.
The management problem
The next problem is of management. Mr. Jason Castenir who took the position of Chief Executive at First Columbia has been allegedly said to be connected in a scam in the past. The scam was even reported to the FBI. The other problem is of promotional emails. As and when the market realizes that the stock price is constantly pumped, the impact starts getting evident on the stock price. The last paid pump was circulated on April 6, 2015 and the compensation that the outfits received was $10,000. The impact of the promotion was evident as the stock jumped more than 150% to close the trading session at $0.0005.