National Graphite Corp. (NGRC)

[RonPaul]

@StockBaller - interesting piece you wrote about NGRC and Kenneth B. Liebscher. Do think the SEC is still investigating Kenneth? Are you still shorting NGRC?

http://stockballer.com/

September 6th 2012 / After an abysmal summer I’m hoping we see some new successful promotions shortly. One upcoming promotion that interests me is National Graphite Corp (NGRC), which has a fresh chart and only got significant volume yesterday with over 300k shares traded. The company website (nationalgraphitecorp.com) is extremely investor friendly and is very similar to many other pump websites, but what interests me most is the story behind NGRC and the market it claims to operate in (graphite).

Just like gold stock pump & dumps of the past year (LBGO, LSTG, SAGD, AAGC etc) which tried to attract sucker investors by hyping up the price of gold and going on about the huge gold boom that had occurred in the past few years, it’s very easy to see how NGRC could be an tempting buy for naive investors, given the right marketing. The price of graphite has skyrocketed since early 2009 (only recently taking a bit of a dip), just like gold, except that I haven’t seen any graphite-based pumps. Most of the worlds graphite is exported from China and an American-based graphite stock set for huge gains seems like a nice idea for an exciting new pump & dump.

Chart of graphite prices (taken from http://www.energyandcapital.com/articles/graphite-mining-stocks/2376 – I’m not sure if this site intends to promote NGRC or some other graphite stock):

The fundamentals for NGRC are ugly, as with all pump & dumps. All promoted stocks go through a similar cycle (typically a ticker change, buying some useless assets, promotion begins hyping up the stock, insiders sell, stock crashes sooner or later etc), and it looks like NGRC is going to be no different. NGRC was previously LUCB before its ticker change in June. LUCB purchased some land which has no indications whatsoever of containing any graphite, obviously for the purpose of hyping this up in future promotional pieces. From a recent 8K:
“On April 24, 2012, Lucky Boy Silver Corp. entered into an agreement with GeoXplor Corporation to purchase a 100% interest in and to the Chedic Graphite Property consisting of 20 Mineral Lode Claims in Township, 15 North, Range 19 East, Sections 25 & 26 Carson City, NV mining claims compromising approximately 400 acres.
The purchase price for the Property is a total of $425,000 in cash, an Issuance of 2,500,000 shares of the Purchaser’s Restricted Common Stock, and a work commitment on the Property of up to $1,000,000 over four years as follows…”

Given that this land is NGRC only real asset as of now, the current market cap of the company (around $40,000,000) seems rather inappropriate. Currently NGRC has over 75,000,000 shares outstanding. That is quite a bit of stock to dump, but it’s nothing really out of the ordinary for pumps of this nature (many successful pumps in the past have reached market caps of hundreds of millions of dollars). If all goes according to plan, the NGRC insiders should be able to net a few million dollars on this scam, after paying for promotion expenses. Then the stock will collapse and the gullible investors who brought thinking this was a real company will be left holding the bag.

Of course searching the latest NGRC 10Q for “doubt” brings up a familiar phrase:

” Our auditors’ reports contain a statement that our net loss and limited working capital raise substantial doubt about our ability to continue as a going concern. ”

Also not surprisingly, the insiders of NGRC who intend to dump stock, particularly “Kenneth B. Liebscher” (Ken Liebscher) have a history of stock fraud, going all the way back to 2002. The only reason this man is not behind bars and is instead able to continue pulling these schemes is because the SEC is enormously incompetent. Thanks to this iHub post for listing some links to articles/PR’s of the past few years detailing Mr. Liebscher’s criminal activities.

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I’ve already found at least one site promoting NGRC, outoftheboxstox.com, which could be set to receive up to $150K for promoting NGRC. After you sign up to their mailing list, you’re soon led to this landing page:

http://outoftheboxstox.com/report.php

It amuses me how similar the copywriting is to other pump mailers, especially the LSTG mailer, and how it’s so heavily emphasized that NGRC is an American company in a booming industry, which owns some land in Nevada that *could* contain graphite. The actual fundamentals of the company are not discussed, because there honestly are none. And as usual, the words “estimated”, “believe” and “potential” are all over the place. Still technically legal, though, and I very much doubt the promoters or the insiders who want to dump stock are going to get into any trouble with the SEC

While I am very confident that NGRC will undergo some serious further promotion and volume, the question for us traders is how effective it will be, and whether there will be real opportunities to profit. If the price action is right I’ll probably take a small long position. Ideally, though, I hope this one is really successful and eventually goes up over $1/share (certainly not likely, but the possibility is there) and shares are available to short later.