Reports that a prominent investor with ties to former President Donald Trump has taken a majority stake in tiny electric vehicle company Elektros (OTCMKTS:ELEK) has its shares rocketing higher in this morning’s pre-market session.
Elektros appears to be trying to capitalize on the current run in prominent, market-leading electric vehicle stocks such as Tesla (NASDAQ:TSLA) and Lucid Motors (NASDAQ:LCID). These names have risen considerably in recent trading sessions.
Elektros has issued three news releases over the last few days, and the latest one claims that Michael Dezer, a wealthy property developer with ties to Trump, has become a majority shareholder in the company. That news has ELEK stock up more than 1,500%, trading at $5.65 a share.
What Happened With ELEK Stock
Michael Dezer is an Israeli-American real estate developer who owns and operates Dezer Properties, a company that invested in real estate in New York and Florida in partnership with Trump before he became president. Dezer, who has donated more than $100,000 to Trump’s political campaigns, is also an avid car collector, reportedly owning more than 1,000 vehicles and building several museums in which to house them.
If it is true that Dezer has taken a majority stake in Elektros, it would be a huge vote of confidence in the tiny company that trades on the over-the-counter market and has a very low float. However, there is reason for investors to approach the latest news concerning ELEK stock with caution — and even skepticism.
Why It Matters
The average trading volume of ELEK stock is just 60,000 shares a day and the company, to date, has not filed any financial or other disclosure documents on a consistent basis. The company also hasn’t filed regulatory documents with the U.S. Securities and Exchange Commission (SEC) on a consistent basis. Before today, ELEK stock was trading at the bottom of the penny stock barrel.
For his part, Michael Dezer hasn’t said publicly what his interest in Elektros is, or if he has any interest in the company. Also, the fact that Elektros has put out three news releases in recent days is an indication that the company is trying to garner attention as the electric vehicle market climbs higher following last week’s initial public offering (IPO) of Rivian (NASDAQ:RIVN).
What’s Next for Elektros
While ELEK stock is set to skyrocket today, the gains could be short lived if the news about the company and Michael Deezer’s stake is proven to be false or even exaggerated. Given how little information Elektros has made publicly available to date, investors should approach this stock with extreme caution.
While it could be that the news is legitimate, it may also be the case that this is nothing more than a pump-and-dump scheme. Be careful!
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On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.