Flooring America, Inc. (PINK:FRAE) Spooking Around on a Paid Stock Promotion?
18 Nov 2010

Flooring America, Inc. (PINK:FRAE) looks like a mysterious ghost company that gets visible only through some sudden moves in the share price of its stock. Yesterday, that happened and FRAE recorded the highest trading volume for its entire history, on no news or updates to cause the unexpected appearance.

Flooring America has a “STOP No Information” status on the OTC markets homepage and its shares get rarely traded on the open market. Though, all of a sudden the price of the stock soared 36.36% yesterday, hit a new 52-week high at $0.0275 and closed the market at $0.0075. The trading volume was by far unseen since FRAE is publicly traded and it amounted 13.91 million shares.

Traders looked quite surprised, but the discussions on the online message boards suggest that some newsletters and alerts have been sent out early in the morning yesterday. No doubt, the trading pattern with the boosted up volume and share price directly after market’s open resembles much of a paid stock promotion. No official disclosures have been made, which means that someone is trying to play the popular pump and dump game.

Floor America is a good candidate for that, as the former company that had one of the largest flooring distribution networks in North America seems not to exist anymore and to be only a shell company with no operations. According to the latest SEC filings, the company has entered into a bankruptcy proceeding in June 2000.

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