Borislav Tonev

Petrosonic Energy Inc (OTCMKTS:PSON) Squashed Once Again

by Borislav Tonev August 2, 2013
4PSON.pngBack in January 2013, the pump for Petrosonic Energy Inc (OTCMKTS:PSON, PSON message board) was heating up rather well. The pumpers, headed by Mr. Tobin Smith, were jumping up and down and waving their arms about, paper mailer brochures were being distributed straight to investors' P. O. boxes and a landing page full of Mr. Smith's optimism was online. The ticker was responding rather well and it was just starting to test the $0.90 per share mark again after it had retreated from the $1+ levels experienced during 2013's first trading sessions.

Then, on Sunday, January 27, a contributor on Seeking Alpha published an article that revealed some truths about the huge promotional effort running for PSON. The author aggressively attacked the people running the company as well as the ones responsible for the pump and being on Seeking Alpha meant that the coverage also appeared on PSON's Yahoo Finance profile.

It had its effect on the ticker as well. The day after the article went live ended in quite a catastrophic drop of around 22%. This was followed by some more red sessions and just one week later, the ticker was standing at just $0.47. A few optimistic press releases, some more brochures circulating around the snail mail and a lot of exposure brought PSON back to life and the hype even pushed it above the $1 mark once again.

On June 18 however, the news of the abrupt end of Mr. Smith's career as a Fox commentator hit the websites and the result was pretty much identical - 45% of the value was gone in no more than three sessions. Once again, the ticker managed to regain some of its dignity and, as we mentioned a couple of days ago, it seems to be holding on rather well considering the tonnes of artificial hype.

Despite that, PSON did display some pretty horrific performance yesterday losing around 27% on a trading volume of more than 3 million shares which means that some the shareholders are asking themselves if they are about to experience a fall similar to the ones seen in January and June.

Well, the sessions to come will give us a definitive answer to that question, but what we can say with absolute certainty is that this time there isn't any apparent reason for the drop. There are no Seeking Alpha articles to expose the truth, Mr. Smith's NBT Equities Research is still going strong and he is actually rather busy pumping other penny stocks like Max Sound Corp (OTCBB:MAXD), BOLDFACE Group Inc (OTCBB:BLBK) and Pulse Beverage Corp (OTCMKTS:PLSB). There hasn't even been a new disappointing financial statement that could prompt some of the former believers to say "Goodbye" to their positions.

3PSON_logo.gifYet, PSON's performance is rather disappointing and this sort of thing is normally observed when the promotional campaign is over. We're not 100% sure that it is. Some posters on the message boards are reporting that they have received the paper-mailer brochure about a week ago which means that the artificial hype might continue for a little longer. Of course, there's no guarantee that it will, but until it's clear, we reckon that staying away unless you can afford to lose a substantial portion of your investment is a good call. Not least because the stock movement at the moment seems unpredictable at best.

Other tickers that have been put under quite a lot of promotional stress include Arch Therapeutics Inc (OTCBB:ARTH) and Xumanii, Inc. f/k/a Medora Corp (OTCMKTS:XUII). Just like PSON they often tend to move up and down with little warning which is why a potential investment in any pumped penny stock should be preceded by a lot of research, due diligence and a careful consideration of the risks involved.

Comments 1

1. Guest
August 08, 2013, 09:04AM

Quotes Who is paying for the mailings, etc?

Type the characters that you see in the box (5 characters).