Borislav Tonev

Hard Mailer Pump Revives Cloud Security Corp (OTCBB:CLDS)

by Borislav Tonev October 7, 2013
40CLDS.pngIt all started at the beginning of March. Cloud Security Corp (OTCBB:CLDS, CLDS message board)'s share price stood firmly at $0.20 but then, someone decided that inflating it artificially would be a good call. The newsletters' alerts started flooding our inbox on March 11 and at roughly the same time, a landing page was set up.

The effects were quite apparent. Out of the twenty trading sessions in March, only three ended in the red and by the beginning of April, the ticker was sitting comfortably above the $1 per share mark. CLDS continued marching on for a little longer but, if you have been reading through some of our older articles, you'd know that we had some doubts regarding the ticker's ability to withstand the pressure. Sure enough, May gave the start of a long and excruciating descend which culminated in a price of $0.25 registered towards the end of June. At this point, we thought that the promotion is over and that CLDS will finally be left to move along under its own steam.

As you can see from the chart at the beginning of the article, the performance hasn't been all that bad. Plenty of news and exciting developments around the company have doubled the share' price in a matter of just one month and with the latest press release informing us that CLDS are about to acquire APP Ventures Ltd. - an enterprise which is supposed to have a product that is"ready-for-market" according to the company CEO - we might expect to see the ticker reach its April heights soon, this time, without the help of the pumpers, right?

Well, we don't want to burst the proverbial bubble for anyone, but there is one major thing that needs to be considered before jumping in - the pump is not over yet. In fact, it's stronger than ever.

A new landing page was set up in August and now we can see that investors are finding paper mailer brochures in their mailboxes. The disclaimers are somewhat confusing. As we said in our previous articles, the old landing page, the one that was set up more than half a year ago, reports a total compensation of $2.5 million. The one launched in August, on the other hand, says that the total amount paid for pumping CLDS is $750 thousand while, according to the hard-mailer's fine print, the figure is $1.75 million.

Whatever the budget, the presence of the colorful brochure is bound to spark the interest of many inexperienced investors. The volumes over the coming sessions should be pretty high, but there can be no guarantee that the share price will surge in the right direction.

One thing is for sure though - the ticker has already run high enough considering the rather dreadful figures in CLDS' latest financial statement. Here's what they had as of May 31:

  • current assets: $39 thousand (mostly in cash)
  • current liabilities: $19 thousand
  • no revenue
  • quarterly net loss: $270 thousand

They did announce a $2 million cash injection recently, which should stabilize things a little bit, but even that won't be enough 03NAMG.pngto justify the $76 million market cap which suggests that a drop in the near future seems more and more certain. The only thing the pump can do is make it more painful.

In case you're still not worried about the ongoing awareness campaign, you might want to have a look at the charts on the right. They represent the stock performance of North American Oil & Gas Corp (OTCBB:NAMG) and Alkaline Water Company Inc 27WTER.png(OTCBB:WTER) - two tickers that got pumped through the snail mail recently. You can see that it's all gone horribly wrong for the people who got a bit carried away and, unfortunately, there are quite a lot of things to suggest that CLDS could be the next penny stock to leave investors out of pocket.

Comments 2

1. Guest
January 04, 2014, 11:23PM

Quotes You are doing the right thing by informing the novice public NOT to buy. Thank you.

2. Guest
October 09, 2013, 08:13AM

Quotes Interesting. I received a pump mailer a few days ago. I am not an investor, but I get this stuff occasionally. I started searching the web 20 minutes ago. Their website is all fluff and no hard info about existing products and who is buying them. The mailer suggested they are going to license their security tech (source code licensing?). But can they sell it? Then I read this article. Hmmmmm. I think it all hinges on whether they actually have security process code that will be licensed to embed in chipsets, or not.

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