Borislav Tonev

Petrosonic Energy Inc (OTCMKTS:PSON) Crumbles In The Absence Of Paid Promoters

by Borislav Tonev August 30, 2013
37PSON.pngThe pump on Petrosonic Energy Inc (OTCMKTS:PSON, PSON message board) was quite a big affair - emails, video coverages, Mr. Tobin Smith's optimistic price targets plastered all over colorful brochures and lots of excited investors. It was a huge thing but, as you can see from the chart on the right, it was also quite tragic.

PSON made a few jumps up and down the chart and you can see the ticker displayed an amazing ability to fly through the $1 per share barrier as if it's not there. Unfortunately, it also showed us that it's capable of annihilating thousands of dollars worth of investments in a matter of hours.

Still, the pump appears to be over now - there hasn't been a single alert over the email for the last month and a half, the hard mailer brochures quoting PSON as the "Oil Tech Game Changer" have probably been recycled into toilet paper already and Mr. Tobin Smith and his NBT Equities Research seem to have moved on to other penny stocks like North American Oil & Gas Corp (OTCBB:NAMG) (who, by the way, are also putting on quite an erratic performance).

Unfortunately, the chart at the beginning of the article clearly shows that the lack of excitement and interest isn't doing the ticker any favors. There are some attempts at recovery, but it would appear that they're futile which would suggest that after the promotional fiasco, traders are not ready to trust PSON anymore and even a new financial statement isn't capable of changing their minds. The company published the 10-Q for the second quarter of 2013 on August 20 and before we discuss the effect it had on the price, we suggest that you take a look at the summary of the most important figures found in it:

  • cash: $1.7 million
  • current assets: $2.2 million
  • current liabilities: $599 thousand
  • revenue: $0
  • quarterly net loss: $945 thousand

It's pretty clear that there are some issues. There's still no revenue and the losses are quite substantial. But then again, just like Petro River Oil Corp (OTCBB:PTRC) (we talked about them earlier today), PSON is part of the exclusive club reserved for penny stocks that have managed to keep their liabilities at bay. They did burn through quite a lot of cash during the reviewed quarter but even so, they're unlikely to overdraft their bank account any time soon. Yet, the ticker has slid by about 16% since the 10-Q came out. So, why aren't investors convinced?

Well, they have been on a huge roller coaster for quite a while now. The ticker moves up and down and despite the lack of paid promotions, it makes some unpredictable runs every now and then (yesterday, for example, it dropped by about 10% with no apparent catalyst). Yet, almost every company has its hardcore shareholders that strongly believe in the future success. Usually, they are the ones keeping penny stocks afloat, but in the case of PSON, we don't see such a thing. That said, there probably were some but, apparently, they have decided to run away.

5PSON_logo.gifAs we wrote in one of our previous articles, back in January Mr. Art Agolli, PSON's CEO expected that revenues should start coming in by the end of the first quarter of 2013. It's pretty clear that this never happened, but on June 10, Mr. Agolli announced in another press release that the revenue generation has finally began. Apparently, he was wrong again since, as you can see from the figures above, the 10-Q doesn't disclose any proceeds from sales of products or services whatsoever. Couple that with the disappointing performance of the $3 million promotion and you will see that PSON still is (and probably will remain in the near future) a risky bet. Make sure you consider your moves carefully.

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