There has been a lot of excitement around Cloud Star Corp (OTC:CLDS
, CLDS message board
) recently. It all started around March 11 when Penny Stock Rumors
sent out an email saying that CLDS is about to be pumped and that the promotional budget is $2.5 million. A special website was set up and, judging by the performance of the stock, investors have been visiting it regularly. We also took a quick look through it.
We're not fond of conspiracy theories and probably that's why we find the all the things written in it rather far-fetched. At one point the authors claim that the Chinese are currently preparing a cyber-attack on the US and the whole thing is twisted in a way that would make you believe that CLDS are here to save us. Let's assume for a moment that the threat is indeed real and think about CLDS' chances of becoming our savior.
What do they have? Well, their main product will be a device that looks like a USB flash drive, you can plug into a PC or a similar device and enter your computer remotely through a secure connection. It allows you to carry all the information of your hard drive anywhere you go, and it's quite convenient, indeed. Will it prevent cyber-crime, though? We're not so sure.
But, let's put on our rose-tinted eyewear again and assume that somehow, CLDS' gadget will protect you from the evil hackers of the Internet. Where can you buy it and how much does it cost? Well, actually, you can't buy it yet. CLDS admit that it's still in its beta testing stage and although the press releases coming out of their HQ have been quite a lot recently, they are still keeping quiet about an official launch date.
What does that mean for CLDS? Well, in a nutshell, it means that they have no money. Their hopes for the safely-enter-your-computer-from-everywhere-in-the-world gizmo are so high, that they have employed all their resources to finance its development. The process has been very long, which means that they are running out of time and money. Here are the financials as found in their latest 10-Q covering the period before November 30:
- current assets: $4 thousand
- current liabilities: $26 thousand
- no revenue since inception
- net loss since inception: $216 thousand
So, with only $4 thousand in cash assets, they will need to complete the testing stage of their product, launch it to the general public and market the thing. And you should also bear in mind that they have some serious marketing campaign in mind - they would like to feature it in TV commercials and even shoot a 30-minute long infomercial that will be broadcast nationally. A bit of a stretch, we reckon.
Still the massive pumping campaign resumes and some emails in support of CLDS are also flying around. Having in mind the budget, we won't be surprised if there is a hard-mailer pump coming down the line. If you think that the results from the snail-mail promotions are different compared to the ones done through emails, you are wrong. On the right you should be able to see the chart for American Graphite Technologies Inc (OTC:AGIN). We covered them on March 15 and, back then, their price was pretty similar to the one we see today from CLDS - $1.24 per share. Now, just a couple of weeks later, they are at $0.50, which means that they have lost around 60%.
We are pretty sure that, although many people seem convinced in CLDS' solidity, they will soon follow in AGIN's footsteps, which is why you should be extremely careful when making your investment decision.