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Summary

• We have obtained several e-mails touting DEAC from a variety of stock promoters.
• The timing of the e-mail promoting DEAC coincides with what would seem to be an irregular increase in cost and buying and selling volume of the inventory.
• The latest financials, stability sheet and funds flow report of the firm appear to be really bleak.
• We have not contacted the company regarding the statements in the report.

Note: This write-up is about a nano-cap stock (also referred to as a "penny stock"). Although all investments are dangerous, nano-cap shares are among the most risky. Between microcap stocks, the most dangerous shares are these which are subject matter to advertising campaigns (such as DEAC). They are also among the most illiquid stocks, normally possessing a massive distribute among the bid and offer at any given minute. Quite usually, it happens that the illiquidity of these stocks does not enable a trader to rapidly near or open a position. DEAC is no exception to that. DEAC is a nano-cap inventory which is traded on the OTC Marketplaces and priced nicely under the 5$ mark. The visitors of this article must be very informed of the aforementioned information prior to undertaking any motion primarily based on the material of this report.

Introduction

DEAC (OTCQB:DEAC) is a firm buying and selling at a value which has recently ran from a selection of roughly $1.60-one.70 to a substantial of $two.30 in the course of the training course of just a handful of days. In this article, we will outline the information which are, in our view, related to the sudden boost in the price and trading quantity of this usually thinly-traded, low quantity stock.

The Advertising

Allow us examine the recent price action and trade volume of DEAC:

The trading quantity and cost of DEAC have the two enhanced a bit throughout December 2014. Advertising email messages were despatched on several situations for the duration of that month and during the pursuing month also. It is quite evident that the email messages becoming sent out and the sudden rise in volume and price of the stock are interconnected functions.

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The Truth: Almost Zero Profits, Negative/Practically Zero Net Revenue, Enormous Desires?

As it frequently transpires with aggressively promoted companies, a glimpse at the balance sheet is typically ample to reveal a grim and bleak picture. It seems that Elite Data Solutions Inc is of no exception to that rule.

In our viewpoint, it is distinct that the existing price of DEAC has practically nothing in widespread with the stock's accurate benefit. If we consider a appear at DEAC's earnings statement, we would see that the company's revenue has remained practically zero and during the complete calendar year of 2014, whilst its internet income has been largely negative throughout that period of time:

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In addition, if we check the most recent 10-Q form filed on eleven/14/2014, we would see that the business is truly labeled as a going worry (with all the attendant circumstances):

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It is primarily based on the aforementioned info that we firmly imagine that DEAC's recent line of company involves possessing its shares promoted and bought at over-inflated charges, relatively than delivering or trying to supply a accurate solution to the market place. But why, you inquire?

The Cause

Why would any organization need to have to have its inventory ticker marketed? That is the most critical concern an investor need to ask himself prior to purchasing a promoted inventor minix neo x8 android tv box. The reply for this hides, of training course, in the small print. Let us have a seem at the disclaimer found in the advertising e-mail touting DEAC which we've obtained:

In straightforward, plain English: a person - may it be the promoter sending out the e mail concept or a 3rd celebration which experienced paid out the promoter in funds for sending the message - is holding shares of DEAC and plans to get rid of them ("dump" them) in the open up industry. Consequently, our conclusion is that the marketing email's sole goal was to have unsuspecting traders buy the inventory at artificially heightened charges, whilst the promoters (or third social gathering) unload their shares upon them.

Summary

It is based mostly on the aforementioned specifics and investigation offered in this article we maintain the opinion that DEAC shares are basically worthless. We imagine that the modern boost in the price of the stock has been a direct result of e-mail messages becoming sent out by inventory promoters in huge quantities and touting buyers to purchase the inventory. This follow is nicely known and is accomplished solely for 1 reason only - so the insiders can unload ("dump") their shares (which they had formerly acquired for almost free) in the cost-free market onto unsuspecting buyers, even though taking edge of the stocks' inflated price tag. In check out of that, we would advocate any trader who experienced obtained shares of the organization to liquidate his complete placement immediately. Even a tiny weak spot in price tag could indicate that the dump is nearing.

Our See

"Hope in reality is the worst of all evils since it prolongs the torments of man" - Friedrich Nietzsche

For longs: If you are long the inventory, we think you ought to consider acquiring out immediately. It is with full self-assurance we say that every upward motion in the stocks' cost is likely to be short-term, as it will never repeat its' preceding highs. We believe DEAC has a price tag target of close to $.01, which it is probably to reach in the upcoming months (or months at most). If you have previously accrued losses on the stock, sell now so as to keep away from added losses. Do not persuade yourself into thinking the inventory price will arrive back again to its previous highs. Do not have hope leaving you keeping the bag as it has happened to much also several. We think DEAC stock's price tag will drop 90% or more in the adhering to weeks. It may be the appropriate decision to lessen your losses by selling now.

"Seem at marketplace fluctuations as your buddy instead than your enemy revenue from folly relatively than take part in it" - Warren Buffett

For shorts: Bearing the aforementioned specifics in mind, we imagine sophisticated traders will swiftly apprehend the thought that shorting DEAC may be a rewarding possibility, as we are persuaded that the potential downside for DEAC is substantial. If you are capable to track down borrows, we imagine shorting DEAC may possibly demonstrate to be lucrative, as its cost may possibly demonstrate to be extremely inflated.

Editor's Note: This article addresses one particular or much more shares buying and selling at less than $1 for every share and/or with much less than a $a hundred million industry cap. Remember to be conscious of the dangers related with these stocks.