MWIS - A Wise Buy At Current Prices?

I alerted MWIS to my subscribers in the chat room this morning. The stock had closed the previous session at $.01 a share and I noted that the news out pre-market should be good for the stock to get a nice push. Sure enough the stock did get a real good push and that push continued right into the closing bell. MWIS hit a high of $.063 and closed the day at $.059 up 471%. It was a great trade for anyone who bought today and I know a few of my subscribers made a nice profit today, but the question is what will tomorrow bring for this stock?

Today's trading illustrates the herd mentality of this market. Irregardless of the news, relevant information, a stock will move just because traders, investors are buying it. I know it sounds simple and obvious, but if everyone today looked at MWIS as something other than a trade, sat down and read the press release, than they would be hard pressed to be buying this stock for anything over $.02 a share, and even that is a stretch. Buying is what moved this stock, in my view irrational buying. Irrational is good for this market, its what drives these penny stocks, and goes hand in hand with speculation. Without it who would dare touch some of these share printing presses? It what attracts new capital into the market and drives some of these stocks into the stratosphere.

If the transaction gets approved and finalized MWIS is essentially being turned into a 150 million share shell stock. We see these trade below $.005 a share, not $.05 a share, and the $.005 variety doesn't have the $1 million + in liabilities that MWIS has. While VRNG is getting almost all of MWIS assets, there was nothing stated about the liabilities, which means MWIS shareholders get to keep the debt while giving up all their revenue producing assets. In exchange MWIS shareholders are getting 1.9 million shares of a stock valued at $2.10, essentially a $2 million equity interest in VRNG. But those $2.10 VRNG shares may be under pressure as this acquisition will cost VRNG at least $615,000, and result in convertible debt being issued.

I am not here to rain on anyone's parade, just pointing out the facts. Anyone comparing MWIS to GWAY should read over the details of this proposed transaction. While GWAY was a dormant shell stock that was reinvigorated with a new company, MWIS is doing just the opposite. If the transaction gets approved, MWIS will be an empty shell with over $1 million in debt and an equity interest in a stock that has been publicly traded for less than a year. Who knows where VRNG stock will trade going forward. Who knows if the equity interest will ever be liquidated and dispersed to shareholders? Even if the VRNG stake is sold, depending on VRNG's share price at the time of the sale, there is a chance it may not even be able to cover MWIS's liabilities.

The bottom line: I think MWIS is a $.002 - $.005 stock as a shell. After the proposed transaction MWIS will no longer represent an operating entity and its stock should lose interest. Maybe down the road MWIS will be the target of a GWAY type reverse merger. But as it stands now MWIS, in my view, in not a wise buy.