Borislav Tonev

There's No Turning Back For Petrosonic Energy Inc (OTCMKTS:PSON)

by Borislav Tonev June 21, 2013
69PSON.pngWe wrote about Petrosonic Energy Inc (OTCMKTS:PSON, PSON message board) yesterday and our article went online just minutes before the latest email about them arrived in our inbox. It was sent out by an entity called The Stock Junction who received exactly $38,020 for their efforts. As always the email is full of bright promises for growth and profits and The Stock Junction quote the name of financial journalist Tobin Smith, but quite frankly, we can't see why they did this. As we wrote in the last two articles, Mr. Smith got fired from Fox News precisely because of his involvement in the pumping campaign for PSON.

As a result the ticker lost a further 13% yesterday and that means that the total losses since their last green session on June 17 amount to a total of 47%. It also means that along with Lot78 Inc (OTCMKTS:LOTED) and African Copper Corp (OTCBB:ACCS) they managed to destroy the investments, hopes and dreams of many people.

In the interest of fairness, Tobin Smith's tenure at Fox News was abruptly ended not because of the things that he said about PSON, but because of the fact that he got paid to do this and we often say that when a person is compensated to provide his/her "expert" opinion which mostly consists of bright projections for the performance of a certain company or its stock, things usually don't end up too well for the retail investors. We've seen it done a number of times through various entities and you can find a many proofs for this on charts all over our website.

The pump for PSON was quite a big one, it was active for the better part of eight months and the fact that the total budget amounts to no less than $3 million means that the people carrying out the campaign made sure that as many people as possible hear it. This makes things even worse, but is there even a glimmer of hope for them and their crushed investments?

Well, we covered PSON a number of times and the thing that has always struck us as impressive is their balance sheet. We go through quite a lot of promoted mining penny stocks virtually every day, but we rarely get to see one with over $2 million in the bank. Here are the rest of the financials once again:

  • current assets: $2.3 million
  • current liabilities: $480 thousand
  • no revenue since inception
  • quarterly net loss: $765 thousand

As impressive as they may be, the assets are still nowhere near enough to justify the market cap which, even after the crash from the last couple of days amounts to nearly $57 million.

Yet, looking at the message boards, we can see that there are still some people who are willing to trust PSON despite the promotional fiasco, the fact that Mr. Smith lost his job around it and the fact that the company has not made even a dime in revenues ever since it started.

44PSON_logo.gifWhether PSON will succeed or not will be revealed in the months to come, but what we can say for sure is that things haven't been going quite according to plan. In January, PSON announced that they have closed a $3.1 million financing deal and back then, Mr. Agolli, the company CEO, stated that the revenues should start coming in by the end of Q1, but right now, we're nearing the end of Q2 and the press release from June 10 proudly announced the start of the revenue generation. With all the things that happened around PSON recently in mind, we're somewhat reserved about the whole announcement, even though it comes around three months after what they first projected as a deadline. If you aren't, however, we recommend that you still perform the necessary due diligence before investing any money into promoted tickers like PSON.

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