U.S. Markets closed

GOFF: A Penny Stock I Warned You About

Ben Brinneman

Goff's One-Day Chart

NEW YORK (TheStreet) -- Goff closed down 37.39% Tuesday, at 36 cents a share, on around 60 million shares traded. In Wednesday morning trading, the stock lost another dime, to 26 cents, off 28.06%. In our Monday piece, we warned you not to go long in GOFF. We said shorting it would be more beneficial. We were right!

Tuesday morning's Goff press release put the axe to the stock. What is interesting is, the release states "potential" to find 20 million ounces of gold, in the very first paragraph. Interpretation: There is no gold and no money. Therefore, traders sold it and a panic selloff ensued!

In the recent press release, you can also see that Goff is pulling from a publicly available data, Columbian Geological Survey, to determine the "potential" to find this gold. Looks like fools' gold to me.

In Goff's 8K filing, you can see Warwick Callasse bought the company and became the CEO, CIO, CFO and Treasurer -- all for the grand price of $25,000. He now owns about 108,000,000 shares of the company. Stocks had gone from 13 cents to 65 cents; boosting his shares to a value of around $30 million to $50 million. He is 30 years old, according to the 8k filing. Not a bad month for Callasse.

As the stock rose and rose, I'm sure profit-taking happened and shareholders sold their shares. Then on Tuesday, April 9, the stock got hammered on the news, as everyone sold their shares and left thousands of bag-holders with this worthless stock.

Goff's Five-Day Chart

Be careful trading penny stocks. Some of them are truly wealth killers, unless you can be on the right side of the trade. Never buy-and-hold stocks with any resemblance to GOFF.

For more information on how to trade legitimate "penny stocks," priced between $2 and $10, check out C Squared Trading.

--Written by Ben Brinneman in Charlotte, NC, owner of C Squared Trading.

At the time of publication, the author held no positions in stocks mentieoned, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE.