Exactly four weeks after its latest promotion, the stock of Onteco Corp (PINK:ONTC
, ONTC message board
) is in for another pump. At the end of last week, two promoters - Sizzling Stock Picks and PennyPayday - got paid an aggregate of $7,500
to launch a brand-new advertising campaign in support of ONTC.
Although the outcome of this effort will not be clear until the end of the upcoming trading session, it will probably fail to take investors by surprise.
In fact, very few penny stocks have been as heavily promoted during the last six month as ONTC. And even if half of all these PR programs in favour of the company had met with success, ONTC shares would hardly have remained in the sub-penny market tier.
So, what was it that made third parties indulge in yet another attempt to pump and eventually short their ONTC shares? Considering that the first tranche of the compensation mentioned above showed up in a newsletter dated Sep. 9, 2011, the leading motif appears to be the official company news that popped up on the same date. As it seems, ONTC seized the opportunity to inform market players that subsidiary NextPhase Lighting, Inc. had now brought a crucial testing of its proprietary Linear LED Luminaire to a promising end. As a result, customers were now able to enjoy the full benefits of purchasing NextPhase products using a great many utility rebate programs. The latter is expected to give the company's sales a boost in the months to come.
Whether ONTC needs to improve its sales figures or not is evident in its latest 10-Q report covering the quarter ended June 30, 2011. According to the balance sheet, ONTC's financial condition revealed:
- cash reserves in excess of $85K;
- negative working capital of $1.34 million;
- $34 thousand in revenue and a quarterly net loss of $320 thousand.
The company appears to have evaluated its intellectual property assets at roughly $3 million. However, until it gets rid of the never-ending pump-and-dump practice and starts generating much higher revenue, investors will hardly buy this figure.