Borislav Tonev

Cloudweb Inc (OTCBB:CLOW) Calms Down a Bit

by Borislav Tonev February 8, 2016

The job of regulators like the SEC and FINRA is to protect retail investors from potentially dangerous investment opportunities. That's why over the years, they have warned the public numerous times about the many pitfalls that the stock market hides. They have warned us about the dangers of companies that go public through reverse mergers, for example, and they have told investors numerous times not to base their decisions on email recommendations. The absolutely astonishing volumes Cloudweb Inc (OTCBB:CLOW, CLOW message board) has registered over the last few sessions show that people are ignoring all these warnings.

A simple landing page, a video, and a few emails from an outfit called Finest Penny Stocks were enough to draw quite a lot of attention to the stock. Some people realize that CLOW is nothing more than an expensive pump and they are treating it as a fast trade and a way to make some quick and easy money. There are others, however, who are trusting the fictional character from the video and are expecting to profit by staying for the long run. Who will be in a better position once the dust settles?

The first group is preoccupied with speculation at the moment. They are wondering how long the pump can last and how high can the stock go. Unfortunately for them, CLOW is already showing some signs of hesitation.

The ticker did run from a little over $0.06 all the way to just under $0.60 last week, but on Friday, it slipped by about 7% and it closed the day at $0.55. At $1.1 million, the dollar volume was huge, but it was nowhere near as colossal as what we saw on Thursday which goes to show that if you decide to play the pump, you should definitely tread carefully. Not least because the aforementioned regulators might just decide to stop warning and start acting.

As for the people who reckon that they're investing in the next big cloud computing company, they shouldn't get too carried away with the hype. CLOW is the product of a reverse merger that took place not more than a few weeks ago. The new UK-based subsidiary apparently offers web hosting services and apart from the fact that it generates an average of $58 thousand in annual revenues, we don't know much about it.

What both traders and investors should understand is that there are a little over 60 million shares waiting to be unleashed on the open market. As we mentioned last week, they were originally sold for just over $60 thousand and we'll now leave it up to you to decide whether there's a coincidence between this fact and the fact that CLOW got pumped during its very first active sessions.

About ten minutes after today's opening bell, CLOW is traded at $0.51 per share (about 8% in the red).

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