Preferred Penny Stocks Pump Catapults VuMee Inc. (OTC:VUME) Up 128%

So far January has been pretty calm, with smaller-grade promotions, but we waited for the monster to burst forward, as it was high time for the new pump by Preferred Penny Stocks. Yesterday investors acquired 30 million VuMee Inc. (OTC:VUME) shares and with a $500,000 budget the volumes and prices for this pump may reach even higher.

But what hides behind the much-hyped company that supplements nine emails with PR messages in well-respected business news sites around the Web? The “View Me” idea is meant to create a web platform for personal advertising for celebrities, through video and other materials. Formerly a paper company, VuMee aims to compete with sites such as YouTube and social networks for the attention of online viewers. But the VUME ticker will become much more famous through the new pump, we expect.

The VuMee company will try to achieve this success with financial strengths that we hope stand up to the task:

• $30,297 cash

• $556,322 total assets

• $648,216 total liabilities

• Zero revenues

The company is obviously development-stage, mostly debt-financed and under its new name since May 2012 has not managed to burn through the assets. Before the pump its stock was barely traded, but the new mailing news sent the ticker up 128% in a single day to 39 cents. Before yesterday’s spike in activity, the stock fell on low-volume selling on two separate trading days in the fall.

We believe VUME is a highly risky pick, destined to spike and fall quickly, aided by mails touting its good performance in the first days of the pump. Along with this VUME sends optimistic messages for adding new content from minor celebrities, yet one may easily see futility in adding to the information overload.

The past record of Preferred Penny Stocks may mean VUME should be taken with a high dose of attention, and quickly bought and sold instead of relying on its dubious business model to provide growing stock prices in the longer term. Preferred Penny Stocks and its smaller-grade subsidiary helpers have a dramatic past record of failures. One of the December pumps, Pub Crawl Holdings, Inc. (OTC:PBCW) jumped immediately on the new mailing, and now trades for less than a tenth of its value. The Pub Crawl company also promised an interesting and developing model based on web technology, but the stock price was not related to real business in any way and its rise was only the work of a pump.

But perhaps the worst blooper for Preferred Penny Stocks was Solo International, Inc. (OTC:SLIO), the ticker that never took off as expected in a pump and the mailers had to cut the promotion short.

In the case of Preferred Penny Stocks news emails, it is best to estimate if you can trade fast enough to cut losses, and to realize that most stock picks fall irreversibly after the end of the pump.