Diversity Group International, Inc. (PINK:DGIN) Enjoys a Short-Lived Rally on a Promotion
07 Apr 2011

A paid stock promotion successfully pumped up the share price of Diversity Group International, Inc. (PINK:DGIN) stock at market open yesterday. Though, what looked like a massive run-up for the shares in the early trading resembled much more massive selling off at the end of the day.

Shortly after market open yesterday a group of stock promoters sent out advertising e-mails for DGIN stock. One promoter points out that the stock of the Pink Sheets company has been “printing” two-digit moves up every day this year, and the another ones also does not fail to promise a huge rally of DGIN today. Both promoters are part of a promoting group, have been paid by the same third party and it looks like the total budget of the promotion was $35,000.

A big rally followed, but did not hold more than an hour as DGIN intraday chart shows. The stock surged to $0.12, which gives still a possible 50% return from the previous close, but then no more buyers came in and DGIN closed the market at $0.08 for a share and a total volume of almost 2.7 million traded shares. The trading pattern resembled much some pump-and-dump activities. Moreover, third party has been disclosed as a non-controlling third party shareholder of Diversity Group International.

DGIN is itself a company that could otherwise not get much of attention. It claims to be engaged in dealing with interest rate, currency and insurance derivatives. Yesterday morning the company said that it is in negotiations with a potential partner that could help it “break ground into several foreign markets that could prove to be highly lucrative”.

Though, statements of such kind alone are rarely enough to make a stock price climb higher, especially the stock of a company that is not an SEC filer and whose business has not brought much of a profit so far. At end of last year DGIN reported $5,000 in cash and total assets for $18,260, against total liabilities of $1.14 million. Revenues for the whole 2010 were minor and the net loss exceeded $1.55 million. Further, the public float should be about 26 million shares as 67.6% of the company is held by affiliated parties.

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