Blog : Tesla Disaster! Shocking, Costly, Massive Penny Stock Blunder
by Peter Leeds on May 12th, 2015
Just to be clear, Tesla is fine, and did nothing wrong at all.
However, they are accidentally involved in a penny stock spiking 10,000%... and collapsing back down in the same day. Investments obliterated, lives ruined, lessons learned.
There are 2 listed companies, Riviera Tool LLC, and Riviera Tool Company. See if you can spot the difference in their names.
Tesla is buying Riviera Tool LLC. They are NOT buying Riviera Tool Company.
Investors piled into the wrong penny stock - Riviera Tool Company was trading for less than one penny on the OTC market, as RIVT. This is the defunct part of the Riviera business, which ran out of money and prospects long ago.
Looking at the trading chart of this penny stock mania, anyone can see there will be no coming back from this for investors.
Just like GM, or any company when they go bankrupt, they transfer any valuable assets into a new version of their business owned by any banks or creditors which had lent them money.
However, the original shares typically continue trading as a worthless shell. Many investors think GM is making a comeback, so they buy GM shares. But they don't distinguish between old GM, and new GM. New GM is the high-priced stock, old GM was the one trading as a penny stock.
Which reminded me about this blog I wrote about the Nation Wide level of going bankrupt, which we are doing.
The Tesla-induced chaos and confusion resulted in thousands of investors buying the WRONG penny stock, which drove the price up as high as 60 cents, on massive trading volume. In fact, the 16,000,000 shares being bought ECLIPSED the average daily trading volume of about zero.
This should stand as a lesson to investors, although who can blame them? You will see legal cases arise from this, especially if there was a spelling oversight in Tesla's annual report, which may have used "Company" instead of "LLC."
This is reminiscent of our own penny stock pick, Forward Industries, which went by the ticker symbol of "FORD." Ford Motor Company's ticker symbol is "F." We made sure to expressly explain which company we were talking about, especially since we ALSO selected Ford Motor (F) when it was trading at $1.87.
You can see more comments about our penny stock pick, Ford, here.
Luckily, even for investors who weren't paying attention to our words of clarification, both F and FORD did great. Ford Motor Company soared from penny stock territory at $1.87 to $14 in sixteen months.
As of January 2017 we no longer publish the blog and it has been removed from the webiste menu.
You are reading this old blog entry because we still like to reference it. :-)
You are reading this old blog entry because we still like to reference it. :-)
Get Our Best Low-Priced Investments
- don't have the time?
- can't do all the work required?
- want selections from the authority?
For only $199 per year, we give you our best high-quality, low-priced stock picks. Along with a full team, Peter Leeds is the widely recognized authority on small stocks. Start making money from penny stocks right away.