The Pump of Crown Marketing (OTCMKTS:CWNM) And It’s Aftermath

Recently a lot of paid promoters have been touting Crown Marketing (OTCMKTS:CWNM) and it seems that all the noise has reached somewhat of a peak registering high volumes of stock traded and an uprise in price.

In May 31’s trade session the price of CWNM‘s stock reached the $0.050 mark which was a good 8% up from the $0.046 price per share the previous day. There was also an increased volume of traded stock which almost reached 4.5 million traded shares.

We have observed such upwards movement in CWNM‘s trade volume from the beginning of the year but in Friday’s trade session they reached an all time high. It will most likely go in the direction of their previous pumps, which was almost the same for their last 2 promotional campaigns. Pumpers tout their stock, CWNM‘s PR team comes out with a few press releases, there are 1-2 days of heavy dumping (3-4 million shares traded stock) and then it quiets down until the next promotion.

The bad thing is that a lot of people are buying what CWNM‘s pump emails and press releases are saying. Let’s take a brief moment to remind ourselves about CWNM‘s financial situation as per the latest quarterly report that they filed with the SEC, which covers the period ended March 31, 2013 and we will continue from there.

 

• cash: $55 thousand
• current liabilities: $54 thousand
• total liabilities: $219 thousand
• revenue: $0
• net loss: $13 thousand

 

They are not in that bad of a financial situation, but they are not blossoming either. The interesting part is that they are talking big about funds that want to invest in them and about million dollar marketing campaigns.

We covered the fund and marketing campaign press releases in our previous article about CWNM in more detail, but let’s just remember the fact that such events should be accompanied by an 8-K report which is needed in the instance of significant cash flows in and out of the company. There has not been such an 8-K report filed to this day, while the SEC provide a 4 working day period for that to be done.

Yet again CWNM‘s PR team has sprung into action and are aiding the pumpers as much as they can with optimistic press releases. Again these releases are rather vague and contain no significant information and are more like something that you would write in order to show someone you are not dead.

The first press release which is from May 30 is centered around a Provisional Patent application that they have allegedly filed with the U.S. Patent and Trademark Office (USPTO). However, the USPTO site is easily accessible and it has a database of all patents and patent applications. Guess what. We found 3 patents using Crown Management as keywords but none of them has anything to do with diet supplements. One of them is for “Prefabricated tile assembly”, the other is for “Compact contact lens case with time tracking device” and the third one is for an “Enhanced visibility character identification system”. As you can see none of them even comes close to anything CWNM tell us they have filed a patent application for. You do the math from here.

The other press release which is from May 31 is about a record breaking re-order rate of 85% that they had for their Raspberry Ketones and Green Been Coffee Extract. This is something that is still yet to be proved by a financial report. The thing that left a bad impression with us, however, was the fact that they are using the phrase “Crown’s signature specialty items”, which is on one hand funny, but on the other hand absolutely bogus, due to the fact that both of these producs are widely known and are produced by a massive number of companies. Furthermore there is still the concern raised from the fact that these products don’t have a website and the question of how CWNM are marketing and distributing them.

With all that in mind be sure to do your due diligence before deciding to invest in this risky stock.